2. oTools of Governance oBoard Responsibilities oPractical Tips/ Board Meetings oFinancial Issues oRisk Management oProfessional Standards TOPICS

3. The Mission Statement Articles of Incorporation The Bylaws Strategic Plan Budget for Current Year Policies & Procedures

4.  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:

5. Articles of Incorporation The Bylaws Strategic Plan Budget for Current Year Policies & Procedures

6. Manage Association’s resources Support and assess CEO Determine, monitor and strengthen programs and services for members Promote Association’s image Ensure legal and ethical integrity Help recruit new leaders Board Responsibilities

7. 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 Relationship

8. 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

9. 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

10. 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

11. Financial Responsibilities of Directors  Annual Audit/Review  Carefully Review Financial Reports  Approve Annual Budget

12. 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

13. 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

14. 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

15. New Form 1099 Requirements  Be 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 Vendors  Supply TIN to all Payors

16. Legal Considerations Duty of Care  Good business judgment at all times.  Due diligence in decision making. Duty of Loyalty  Avoid conflicts of interest. Duty of Obedience  Faithful to the mission and goals.  Follow the governing documents.

17. Insurance Coverage oGeneral Liability - covers property damage oDirectors 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

18. Business Judgment Rule Protected if one acted reasonably and in good faith. Insulates decisions from judicial review absent fraud or bad faith.

19. Questions???