How Does the National Association of Realtors Justify 923* BoD?

By
Real Estate Agent with Progressive Realty (Boise Idaho) www.Progressive-Realty.info DB-17066
https://activerain.com/droplet/5cNf

There have been lots of changes lately at the National Association of Realtors (NAR).  The only thing constant in this world today is in fact change itself.

They thought about changing the LOGO but after spending countless hours and money, they appear to have tabled or abandoned that change.

They announced an increase in dues which always will cause people to complain.  They slowed down, heard but not sure if they listened, and appear to be going forward with the dues increase from $120 a year to $150

However, the one thing I have been struggling with is how in the world they justify having over 900* voting NAR Directors?  I had no idea what the "right" number should be so I started doing a bit of research.  I tried to find companies/organizations that even had 100+ directors and failed in my attempt.  Here is what I have learned so far:

According to: https://www.briefinggovernance.com/2017/12/as-spencer-stuart-releases-its-latest-sp-500-board-index-how-does-your-board-compare/ they looked at the board composition of S&P 500 companies and found the board size averaged 10.8 members and only 18% had over 13 members!  According to this article: http://graphics.wsj.com/boards-of-directors-at-SP-500-companies/ there were 4,500 people serving on the S&P 500 which would be an average of only 9 directors per company!  This Wall Street Journal article illustrates that smaller boards get bigger returns: https://www.wsj.com/articles/smaller-boards-get-bigger-returns-1409078628 stating "...large boards underperformed peers by 10.85 percentage points".  In this article: https://www.boardeffect.com/blog/board-size-nonprofit-governance/ it states "the optimal number of directors for boards to make a decision is seven. Every added board member after that decreases decision-making by 10%." That would mean that NAR has 916* Board of Directors who's effective contribution is -10% each!

One organization that is very controversial today is the NRA.  (No I wasn't dyslexic - grin.)  They claim to have 5 million members compared to NAR's 1.2 million.  Somehow, they still get the job done at NRA with 76 board members.  That means NRA is about four times the size with 10% of the board members!

If the National Association of Realtors would consider reducing the board size drastically, think of the money that would be saved for it's members while simultaneously increasing it's effectiveness!  I know that NAR does not pay most of it's board members, but they do have to communicate with them, house them for meetings at least twice a year, train them, etc.  Some local and state associations do pay for travel and expenses for their members who serve on the board.

While we are at it, we should look at the benefits of having people that are not Realtors on the board of directors.  We should have people that insight from the mortgage industry, title industry, technology partners, attorneys, etc considered so we get their insights.

I will be sending this blog to the people that are serving via our Boise Regional Realtors and Idaho Association of Realtors to see what they think.

I have tried to look to find the benefit of having possibly the largest board of directors in the United States, but so far, the evidence is to the contrary. 

 

* This blog originally claimed there were "over 700" NAR Board of directors, but I found the actual number on their website so I updated the blog accordingly. 

 

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Ambassador
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Michelle Carr-Crowe Just Call 408-252-8900 Top 1%!
Get Results Team...Just Call (408) 252-8900! . DRE #00901962 . Licensed to Sell since 1985 . Altas Realty - San Jose, CA
Family Helping Families Buy & Sell Homes 40+ Years

I thought that was an incredibly high and inefficient number myself.

Jun 15, 2018 12:25 PM #1
Rainmaker
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Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Jim loved this post, indeed I am sure   @Fred Griffin   and Debe Maxwell, CRS    would have loved this post too bad indeed you did not submit in time!!! maybe the powers to be can give you a late submission reward!! 

Jun 15, 2018 12:29 PM #2
Rainmaker
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Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

for some reasons I can not ping @fred griffin

Jun 15, 2018 12:30 PM #3
Rainmaker
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Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

Nice analysis Jim.  A

Jun 15, 2018 01:39 PM #4
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Anna Banana Kruchten CRB, CRS 602-380-4886
Phoenix Property Shoppe - Phoenix, AZ
Arizona's Top Banana!

Jim....the saga goes on with NaR and somehow why am I not surprised.  Why in heavens name do we need 700+ board members?????

Jun 15, 2018 04:12 PM #5
Rainmaker
292,284
Brad Thomsen
Big Bear Realty - Edmonds, WA
Real Estate Services

Uh... why do we need NAR?...

Jun 15, 2018 05:32 PM #6
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Liz and Bill Spear
RE/MAX Elite 513.520.5305 www.LizTour.com - Mason, OH
RE/MAX Elite Warren County OH (Cincinnati/Dayton)

Jim, I think we might be comparing apples and oranges when we compare a typical corporation to NAR.  That 700+ board member group is more of a political framework, (e.g. like Congress) and representing the various local areas, and we all know how often we say real estate is local in this business. 

Comparing that to the NRA, I'd say their membership may not be nearly as diversified in what they want or how they do things, so the representation can be much, much smaller. 

Jun 15, 2018 06:09 PM #7
Rainmaker
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Lisa Von Domek
Lisa Von Domek Team - Dallas, TX
....Experience Isn't Expensive.... It's Priceless!

Great post Jim Paulson Congratulations on the well deserved Feature!

Jun 15, 2018 09:08 PM #8
Rainmaker
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Janis Borgueta
Key Properties of the Hudson Valley - Newburgh, NY
LIC RE Salesperson

NAR is a lot like the AMA - they are not for the people they represent. These giant boards end up voting to serve themselves. The ridiculous change and wasted money on that logo is one example of how they are not doing much to serve the individuals. 

Jun 16, 2018 02:51 AM #9
Rainmaker
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Dorie Dillard CRS GRI ABR
Coldwell Banker United Realtors® ~ 512.750.6899 - Austin, TX
Serving Buyers & Sellers in NW Austin Real Estate

Good morning Jim Paulson,

So glad to see your post featured! Great investigative work shedding some light on NAR from a point of view we haven't considered before!

Jun 16, 2018 04:33 AM #10
Rainmaker
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Dave Halpern
Keller Williams Realty Louisville East (502) 664-7827 - Louisville, KY
Louisville Short Sale Expert

With 700 board members there is no accountability, just a herd mentality

Jun 16, 2018 07:16 AM #11
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Debb Janes EcoBroker and Bernie Stea JD
ViewHomes of Clark County - Nature As Neighbors - Camas, WA
REALTORS® in Clark County, WA

Hi Jim, add me to the list of Rainers who agree with you, 700 board members is overkill.  Glad to see this featured and hope you get point for Debe's NAR challenge.  As for a membership increase - let's audit them and find out how the dollars are being spent first. 

Jun 16, 2018 07:25 AM #12
Ambassador
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Fred Griffin
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

Excellent post, Jim.   

  The NRA needs a complete and total overhaul.   The "700 Directors" is absurd... and I would venture that it is a facade, to convince local Boards and Associations that somehow they have input and control over this behemoth.  

   Janis Borgueta mentioned the AMA not representing its members.  The same can be said for other political activists/hogs at the feeding trough like AARP.   But this holds especially true for NAR.  They are completely out of touch with the members, and they do not care.  

 

      Final thought - add an image, even the Realtor logo, to this post, so that it can be entered into the current "You are the CEO of NAR - What Will You Change" contest.  Post a link to it on that contest page, thank you.

Jun 16, 2018 07:47 AM #13
Rainmaker
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Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

The answer to better food is more chefs in the kitchen....?  Really?

Jun 16, 2018 07:58 AM #14
Rainmaker
576,917
Debra Leisek
Bay Realty,Inc Homer Alaska - Homer, AK

it would be nice to think there are 700 board members helping make decisons that affect us on every level local, state and National.... but we know that is not true

How many boards are there across the nation?  In Alaska we had 8 but common core killed one so we have 7 boards and 1 state board... cant imagine how many boards all together but i am pretty sure most of them have no input into NAR agenda at all 

 

Jun 16, 2018 11:13 AM #15
Rainmaker
295,932
Jim Paulson
Progressive Realty (Boise Idaho) www.Progressive-Realty.info - Boise, ID
Owner,Broker

Correction:  I just found the exact number on NAR's website.

2018 Board of Directors

Appointments:  923 

I will be updating the blog above accordingly.

Jun 16, 2018 03:08 PM #16
Rainmaker
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Richard Bazinet /MBA, CRS, ABR
Realty ONE Group - Scottsdale, AZ
Phoenix Scottsdale. Sellers, Buyers & Relocations

Very good post my friend, great observations. Are you participating to Debe Maxwell's contest? You should write up an entry.... and one more thing for NAR to fix.

Jun 18, 2018 07:22 AM #17
Rainmaker
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Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
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It might be kind of shaky ground but it’s worth standing up for something you believe in if you believe in an articulate way.

Jun 21, 2018 11:26 PM #18
Rainmaker
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Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

Richard Bazinet /MBA, CRS, ABR I agree! Very well thought out but also very tricky and it’s hard to do that.

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Jun 26, 2018 12:37 AM #20
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