o Tools of Governance

o Board Responsibilities

o Practical Tips/ Board Meetings

o Financial Issues

o Risk Management

o Professional Standards

TOPICSTOPICS

• The Mission Statement

• Articles of Incorporation

• The Bylaws

• Strategic Plan

• Budget for Current Year

• Policies & Procedures

Develops and delivers programs, services and related products that maintain and elevate the high standards of the real estate business and the professional conduct of its practitioners.

Assists members in serving the public ethically and successfully with the highest degree of professional ability in real estate matters.

Promotes and preserves the right to own, transfer, and use real property.

Protects the right of members to conduct business within a framework of fair and reasonable laws and governmental regulations.

In principle and in practice, the Maryland Association of REALTORS® values and seeks diversity and inclusive participation within the field of real estate and recognizes each member as a unique individual.

The Mission Statement

The Maryland Association of REALTORS® exists to support all segments of its membership and their specialties. Through collective efforts with local boards/associations and the NATIONAL ASSOCIATION OF REALTORS®, MAR:

• Articles of Incorporation

• The Bylaws

• Strategic Plan

• Budget for Current Year

• Policies & Procedures

Manage Association’s resourcesSupport and assess CEODetermine, monitor and strengthen

programs and services for membersPromote Association’s imageEnsure legal and ethical integrity Help recruit new leaders

Board Responsibilities

Two Elements, One Team

Leadership vs. Management

• Board Focus: governance, strategy

• Staff: Day to day operations, advice to Board

• Board & Staff: partners, allies, collaborators

The Board/ Staff RelationshipThe Board/ Staff Relationship

• Confidentiality of Info/discussions

• Make a “No Blackberry” Zone

Responsible, Effective,

Board Service

• Meetings:– Attend– Start/ End on time– Be Prepared

• Avoid Conflicts – Interest– Commitment

Meetings• Minutes

– Legal record of meeting

– Not a record of side conversations or reminder document

– Don’t retain audio recordings or notes once minutes are approved

– Minutes are approved at next convened meeting – change if amended

Meetings• The Rules of Order

– Procedural rules maintain order at meetings

– All speakers must be recognized by the chair

– Chair may set time limits

– Learn the basics of rules of order to be sure motions and procedures are understood

Financial Responsibilities

of Directors

Annual Audit/Review

Carefully Review Financial Reports

Approve Annual Budget

Form 990 Annual Information Return of Nonprofits Increased focus on internal governance Failure increases chance of audit Review of Form 990 by Governing Body Policies

– Conflict of Interest– Document Retention and Destruction– Expense Reimbursement– Compensation Review

Financial Review

Full Audit or Review?– Based on Bylaws or Legal Requirement– For 501(c)(6) formal annual financial statement

should be prepared by independent accountant

Recommend Monthly Review by BoD– Compare to Budget– Explain Variance over Certain Percent

Full Audit or Review?– Based on Bylaws or Legal Requirement– For 501(c)(6) formal annual financial statement

should be prepared by independent accountant

Recommend Monthly Review by BoD– Compare to Budget– Explain Variance over Certain Percent

Accounting Structure

• At Least 2 People• One to Record Transactions• One to Review and Reconcile• Ideally, a Third Would Make Bank Deposits

and Mail Vendor Checks• Good Segregation of Duties

– One Person Should not Receive and Record

New Form 1099 RequirementsBe Prepared for 2012

– Groups Lobbying for Change

Issue 1099-MISC if pay person OR corporation $600 or more– Includes Payments for Property– Payments to Tax-Exempt Org. Exempt– Payments by Credit Card Exempt

Obtain TIN from all VendorsSupply TIN to all Payors

Legal Considerations

• Duty of CareGood business judgment at all times.Due diligence in decision making.

• Duty of LoyaltyAvoid conflicts of interest.

• Duty of ObedienceFaithful to the mission and goals.Follow the governing documents.

Insurance Coverage

o General Liability - covers property damageo Directors and Officers Errors and

Omissions (E&O) - covers the actions of the leadership for “Wrongful Acts” but excluding acts outside scope of duties, criminal acts, or fraud/dishonesty

Business Judgment Rule

• Protected if one acted reasonably and in good faith.

• Insulates decisions from judicial review absent fraud or bad faith.

Questions???