Governance Game Changer Presidential Advisory Group (PAG)

For three years, the Governance Game Changer PAG has examined the components of governance of the National Association, including structure, process, people, resources, and culture/environment.

The PAG recommendations, published in the report below, are based on a comprehensive, multi-year plan involving examination of research, member feedback, and case studies from both in and outside of the real estate industry. We believe these recommendations support efficient and transparent operation of NAR, allowing the National Association to govern forward, well into its second century.

View the recording of the Governance PAG Special Report webinar.

We look forward to continued discussion and dialogue via the Hub, and welcome your questions/comments at governancepag@nar.realtor.

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Frequently Asked Questions

Delve deeper into the Governance Game Changer PAG recommendations. Please check back often, as we will be regularly updating the Frequently Asked Questions.

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1. What is the governance game changer PAG?

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.

2. What changes are being recommended to NAR’s governance system?

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.

3. How will the new Board of Directors be different than the status quo?

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.

4. How will these changes improve current NAR governance?

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.

Knowledge-based decision-making

  • 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.

 Accountability

  • For example, requiring NAR governance leaders to meet stated expectations and creating a system of checks and balances to ensure comprehensive input and oversight by a variety of stakeholder perspectives.

Transparency

  • 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.

Nimbleness

  • For example, having more frequent meetings of the Executive Committee and using technology to enable and encourage more frequent committee meetings so that the business of the association can be conducted year-round.

Engagement

  • 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.

Efficiency

  • For example, adopting a simplified formula for appointing constituency-based directors on NAR’s Board of Directors such that local and state association allocations are calculated independently of one another.

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.

5. What’s a high-level overview of how this new system of governance will work?

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.

6. Without a Delegate Body, how will the new system of governance be representative of all REALTOR® associations?

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.

7. How will the new state and local association Director allocation formulas work?

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.

PAG Sample Allocation for State/Local Associations

8. What are the 28 new competency-based seats on the Executive Committee?

“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.

9. Who has authority to approve committee recommendations?

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.

10. What is the new role of Regional Vice Presidents in the new governance system?

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.

11. How will we ensure that NAR leaders are effective?

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.

Qualifications

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.

Performance Expectations

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.

Remaining Relevant

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.

12. What is the timing for effectuating this new system of governance?

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.

Our "Why"

What Is the Presidential Advisory Group Examining About NAR Governance?

There are five distinct categories of questions that must be considered for an organization like NAR to make sound decisions:

Structure

Structure

What decision-making bodies and positions do we need? What should their roles and responsibilities be? What authority should they have? What structures are in place to engage members in the process?

Process

Process

This is the way we do things. In governance, this includes things like how we appoint and elect people to positions. How we develop future leaders. How we plan and set priorities. How we set policy.

People

People

Ideally in good governance, the right people with the right skills and experience are in the right positions at the right time! So, we have to look at things like the requirements and qualifications for different positions, and how we orient and train our volunteers and leaders so they – and NAR – can succeed.

Resources

Resources

Is our governance system efficient? What amount of dollars and staff and other resources does it take to run the system? And from the member’s point of view... is getting involved in NAR governance efficient? How much time and money and effort does it take to get involved? Do we make it easy and convenient, or hard?

Culture

Culture

This is all about the experience of being involved. What’s it like to serve on a committee or the Board of Directors? Are you comfortable speaking your mind? Do you feel that the work is meaningful and that your contribution is appreciated? Are expectations clear, and are people accountable?

Keep Up to Date & Follow the Advisory Group's Journey

The NAR Leadership Team approved the PAG Report in August, and will seek approval by the Board of Directors and Delegate Body at the November 2021 REALTORS® Conference, when we expect to meet live and in person. The next few months will be devoted to communicating the PAG’s recommendations to the directors and other key stakeholders to ensure understanding and support.

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2020

Some of the PAG’s recommendations that were procedural and organizational in nature and did not require a constitutional or bylaw amendment, were presented to and approved by the NAR Leadership Team in August 2020. Some of these recommendations are already being incorporated into NAR processes. The approved recommendations can be summarized as follows:

  • Creation of a Strategic Planning Committee that would oversee the development and oversight of NAR’s strategic plan.
  • Creation of a Leadership Identification and Development Committee that would be charged with reviewing and recommending to the Board of Directors qualifications, performance expectations, and accountability mechanisms for NAR leadership positions.
  • Specific qualifications for volunteer leaders, along with orientation and training that focuses on the essential information, skills, qualifications, and performance expectations.
  • Enhance NAR directors’ role to ensure ongoing communication and advocacy for NAR decisions, policies, and programs.
  • Specific performance requirements for all appointed volunteer positions, that address attendance, participation, and training requirements.
  • More opportunities for all to participate in governance meetings electronically.
  • Greater awareness and understanding of the committee selection process to ensure transparency.
  • Directors that are more fully engaged in the business of the association through participation and service on other NAR committees or advisory boards.

2018-2019

We asked, you answered, we listened. In its beginning phase, the PAG was all about asking questions of both members at large and of key stakeholder audiences. The team conducted research through surveys, stakeholder interviews, in-person forums at REALTOR® conferences, and reviewed similar issues from like-minded organizations.

Key takeaways from each initiative: