The Governance Game Changer PAG is a multi-year effort to examine the components of NAR’s governance system, including structure, process, people, resources, and culture. This 50-member PAG represents all stakeholders with widespread perspectives on NAR governance. With the Leadership Team’s approval and support, at the November 2021 conference, the NAR Board of Directors and Delegate Body will be asked to approve a number of recommendations to support the effective, efficient and transparent operation of NAR, allowing the National Association to act deftly and proactively in its second century.
Check out the many resources explaining these recommendations available on this page.
NAR’s Board of Directors and Delegate Body will be asked to approve recommendations that transition NAR into a modern, mission-driven governance system. As explained in detail in the PAG Report (see above), these recommendations would:
- Eliminate the Delegate Body and transfer its authority to the new Board of Directors.
- Constitute a new Board of Directors capped at 1,000 members whose new authority, role, and focus would be as a strategic body representing the full diversity of the membership, and implement new state and local association Director entitlement formulas.
- Constitute a new Executive Committee that is substantially smaller, meets at least four times a year and is more nimble than the Board of Directors. The new Executive Committee has authority to approve committee recommendations and policy changes, except for those which specifically require approval of the Board (amendments to the new Bylaws and to the Code of Ethics, NAR budget, dues and assessments), and committee recommendations that the Leadership Team or Executive Committee may refer to the Board for vetting and approval.
- Establish an enhanced role for the Regional Vice President position with new qualifications and performance expectations.
- Establish leadership qualifications and performance expectations for all appointed leadership positions at NAR that will be the purview of the new Leadership Identification and Development Committee to oversee and implement.
The new Board of Directors will continue to be charged with oversight of NAR’s big picture goals and strategy while not having responsibility for tactical governance tasks. That means that the tactical work of reviewing and approving committee recommendations and policy positions will transfer to the new Executive Committee, while giving authority to the Leadership Team and the Executive Committee to refer for approval any committee recommendation or action to the Board of Directors when it would benefit the association from having the review and approval of a body that represents the full diversity of the membership. The new Board will also have the authority to approve the NAR budget, dues and assessments and will absorb the current authority of the Delegate Body to approve changes to NAR’s Constitution and Code of Ethics. This will create more nimble decision making while preserving the representation of all member stakeholders.
The composition of the new Board of Directors is enhanced by adding 100 seats specifically for small and medium local REALTOR® associations to ensure that their voices are part of the Board’s decision-making process, and new formulas for allocation of local and state association Director seats are being recommended.
Each recommendation for the new governance system is intended to further one or more of the 8 ideals of governance:
Focus and Clarity
- For example, creation of a Strategic Planning Committee and adoption of a strategic planning process that engages all governing bodies and focuses the work of the Association on key priorities.
Diversity, Equity and Inclusion
- For example, creation of a Leadership Identification and Development Committee charged with cultivating and developing future leaders for NAR from within the full diversity of the membership.
For example, requiring all appointed NAR governance leaders and elected RVPs to satisfy defined Leadership Qualifications and Performance Expectations, ensuring a more open flow of information and input to support governing body deliberations, and reconstituting the new Executive Committee to be more representative of different perspectives and experiences.
For example, implementing a new process for electing Regional Vice Presidents and creating a process for allowing members to participate in governance meetings electronically while ensuring that proper security measures are in place to limit access to NAR members and voting by committee members only.
For example, implementing more opportunities for all members to participate in governance meetings electronically and encouraging directors to communicate with members directly on NAR decisions, policies, and programs.
Having these ideals as the guiding light in NAR’s governance system will ensure that NAR can continue to govern forward and serve members for many years to come.
The governance of the association will be vested in the new Board of Directors – a diverse and strategic body representative of the entire national membership. The new Executive Committee will assume authority of more operational issues, such as approving committee recommendations, and will raise important industry or association issues to the new Board of Directors for their input or approval. The Leadership Team will operate as it currently does, having the authority to act on behalf of the Executive Committee and the Board of Directors between meetings. NAR Directors, Regional Vice Presidents, Committee Liaisons, Chairs and Vice Chairs will each be expected to meet heightened criteria for qualifying and performing in those positions.
This new organization and accountability creates checks and balances throughout the entire governance system.
The PAG conducted extensive research to understand the will of the members and association executives regarding the 1000+ member Delegate Body and learned that the overwhelming perception of these stakeholders was that the Delegate Body was not a meaningful or valuable volunteer leader experience. The body was seen as redundant and unnecessary given the large size of NAR’s Board of Directors.
The new system of governance will transfer the Delegate Body’s limited authority to the new Board of Directors and will create opportunities for more representation of small local associations on the new Board. To that end, the new Board of Directors will have 100 seats available for associations with fewer than 2,000 members – 50 for associations with 500 to 1,999 members and 50 for associations with fewer than 500 members.
The number of directors each state and local association is entitled to will be based on the association’s percentage of NAR membership. State and local director allocation will be calculated independently, with no connection between the membership growth of a local association and the number of directors the state in which it is located is entitled to.
Following are sample calculations for a state and a local association. See the PAG Report for more details.
“Competency-based” seats refer to those seats held by individuals based on their skills, experience, expertise, or perspectives. Needed competencies are reviewed and recommended to the Leadership Team on a regular basis by the Leadership Identification and Development Committee based on a review of the NAR Strategic Plan, annual priorities, critical ongoing issues, and emerging issues to be addressed. These positions will be appointed from a pool of competency-based applicants by the Leadership Team for two-year staggered terms.
Under the new governance system, the authority for approving committee recommendations will move from the Board of Directors to the new Executive Committee. However, the Leadership Team and the Executive Committee may refer any committee recommendations to the full Board of Directors for its review and approval. Such referral to the full Board may be deemed advisable for major industry or business issues with potentially far-reaching import and impact. The new Board of Directors will maintain sole authority for approving the annual budget, including dues and assessments, as well as changes to the new NAR Bylaws and Code of Ethics.
The position of the RVP will transition from being the “voice of the President in the Region” to a more meaningful role focused on the issues and specific duties that support NAR initiatives and effective decision making at the national level, as directed by NAR. Regional Vice Presidents will have heightened expectations to lead and coordinate activities, such as chairing Regional Caucus meetings prior to NAR Board of Directors meetings, for the purpose of ensuring that all significant NAR initiatives or proposals that require Board of Directors approval are thoroughly discussed and vetted by the Region’s NAR Directors and State Leadership.
The association will establish qualifications for members serving in all positions in the new governance system, ensure diversity and inclusion in the selection process and makeup of the various bodies, and establish clear expectations and accountability measures as well as new education and training for all volunteers.
In a member-driven governance system, the Association must make every effort to ensure positions are filled with members who will bring the right set of skills and experience to satisfy position requirements, support sound decision-making and provide a more satisfying volunteer experience. Each appointed governance leader and elected Regional Vice President will have to meet specific qualifications to be eligible for and maintain their positions.
Diversity & Inclusion
NAR has adopted a commitment to solicit a diverse pool of qualified candidates to serve on committees. A diverse pool of qualified candidates is one that reflects or represents the general membership and industry we serve across differences including – but not limited to – gender, race, ethnicity, sexual orientation, age, geography, professional experience, areas of expertise, and political affiliation.
Acknowledging that clear expectations and accountability are key to successful governance, the PAG recommends specific, express performance expectations for each appointed NAR leader and elected RVP which are envisioned to help achieve the Ideals of Governance. In addition to these required qualifications and performance expectations, NAR volunteer leaders will be encouraged, though not required as a condition of volunteering, to contribute to RPAC.
In 2020, the Leadership Team approved the PAG’s recommendation to create a new Leadership Identification and Development Committee with the charge of reviewing and recommending to the Board of Directors qualifications, performance expectations, and accountability mechanisms for NAR leadership positions. The committee will collaborate with the CCRC to create a process supporting the identification, cultivation/development and appointment of qualified volunteers and leaders for NAR as directed by the Board of Directors and Leadership Team.
So, this committee will be ready to adapt the qualifications and expectations of NAR leaders to match the evolving needs of the national association.
As outlined on the last page of the PAG Report (see above), the PAG recommends a two-year phased approach to implementing the recommended changes. This phased-in approach is geared toward eliminating possible disruption and providing for fair and comprehensive onboarding for new positions, orientation, training, and expectations. The Delegate Body will have their last meeting in November of 2022, the new Board of Directors will have their first meeting in May 2023 and the new Executive Committee will have its first meeting in January 2024.