Board Of Directors

Definition of "Board of directors"

Written by

Kim Andrews

EXP Realty

We know that the board of directors meaning defines a body of high executives who make significant daily decisions. But what is the definition of board of directors precisely?

Typically, the board of directors definition implies a group of individuals who have joined to manage and control a company’s, for and non-profit organizations and government agencies’ activity. 

The board of directors is critical in the existence and management of public organizations.

Regularly, the board of directors is a quintessential entity in the life of public organizations, which trades shares publicly (unlike public schools.) So, you can buy and sell their shares on the stock market. Did you know that the intricate NASDAQ and the New York Stock Exchange require listed and trading firms to feature a majority of an independent board of directors?

A public company’s shareholders decide whom to be elected as board members. In the case of public organizations, having a board of directors is a must. 

What are the number-one objectives and responsibilities of the board of directors?

Being a member comes with great responsibility because they establish fundamental company policies. In addition, the board of directors must bring decisions on vital matters, such as finances, expenses, and income distribution. Consequently, they have the authority to establish the yearly budget for marketing, among many others. Nevertheless, they decide on how much dividends (if any) shareholders receive, like in the case of a real estate investment trust. Following in the footsteps of a mighty board of directors, you can also become a budgeting pro individually!

Thirdly, they must represent the shareholders’ and management’s best interests by appointing and supporting the CEO to outline the best business strategy. As all power concentrates in their hands, they assume the authority when it comes to firing senior personnel (even top executives) and hiring new workforce instead. Figuring out a just compensation for top executives also belongs to their jurisdiction. 

What is a “board of directors real estate”?

Likewise, the board of directors in real estate determines a group of people elected by real estate companies (such as real estate brokerages) stockholders to manage the firm according to the corporate charter. The senior management appoints the board of directors. Furthermore, it designates top management executives and representatives. The board has a vital say in the company’s business policies.

The National Association of Realtors and its board of directors

Regarding the most notable real estate organizations in the United States, we must mention the National Association of Realtors® (NAR). One of the most prominent American trade associations represents the best interests of its over 1.4 million members from the residential and commercial real estate industry. 

What are the primary responsibilities of the NAR Board of Directors?

The following are the rights and tasks that the NAR Board of Directors has:

• Establish the Association's guiding principles 
• Determine public policy stances with regard to the real estate sector.
• Decide on financial matters, such as costs, expenses, and membership fees
• Approve member initiatives and services
• Approving changes to the NAR rules and regulations 
• The Board of Directors can recommend amendments to the NAR Constitution and Code of Ethics submitted to the NAR Delegate Body. 

Individual duties and obligations

Simultaneously, individual directors will assume specific accountabilities. First, their expertise, wisdom, skills, discernment, and spirit as a member of the Board of Directors are crucial to the Association and its membership. Under such circumstances, they must be able to identify the problems essential to their constituency and bring them to the Association’s notice. And last but not least, directors have the moral responsibility to inform the board of directors about official measures to be taken in this regard.

The NAR Board of Directors meets twice annually, namely in May for a Legislative Meeting and in November for Conference and Expo.