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.