Does your MLS Board of Directors act like a technology company board? Part 1

by THE WAV GROUP on November 17, 2010

In many of our conversations with MLSs we hear frustrations expressed about how board meeting discussions dwindle down into minutiae on a regular basis. Instead of talking about how to position the company for the future, the dialog degrades into discussions rehashing a committee recommendation for a small change to the rules and regulations or a $349 line item on the budget.

Does this sound familiar?  If so, then there are several changes you might want to consider, but let me focus on just one for this article.

When you look around the room at your next MLS board meeting you likely will see only those involved in the real estate industry as practicing REALTORSÒ, affiliates or Association Executives. While these professions and perspectives are VERY important to an MLS organization, there are others that may need to be considered as well in our view.

First, let’s talk about what a MLS organization is at its heart.  I believe it is a technology services organization built for a specific target audience – real estate professionals.  While MLSs definitely have to provide data quality oversight and sometimes arbitration, these organizations generally provide highly affordable and reliable services to their members – in essence, they are technology companies.

If you examine the board make-up of just about any successful technology company,  they are led by highly skilled, senior level professionals skilled in a variety of areas  Generally the boards for technology companies have a marketing executive, finance executive, at least one fellow technology executive, human resource, customer service executive and sometimes a representative from an educational institution or the not-for-profit sector.

I am not aware of any technology company board comprised exclusively of customers.   Look at Apple Corporation’s Board of Directors for example. Their board is comprised of senior executives from the retail sector, technology and financial services, not to mention the former Vice President of the United States!  How’s that for some diversity of thinking?

When I ran Surveyor Corporation, a start-up web camera services company, I had the former CFO for Intuit Corporation, a serial entrepreneur, the first head of operations for Sun Microsystems and a marketing executive from Silicon Valley along with the founder of the company who wrote the first jpeg and mpeg software.   This is a fairly typical board make-up for small to medium size technology companies.

While the MLS organization does have unique characteristics from other types of technology companies, their core function is to deliver reliable, easy to use software and customer support – very similar to the role of many technology companies.

Since MLSs have grown out of their highly successful association partnerships, it seems logical that their governance models also grew out of these relationships.  While it is critical that the real estate industry have significant representation on the board, I do believe it would be helpful to broaden the insight, advice and counsel being sought to include non-REALTORÒ professionals skilled at managing technology companies.

This is especially important for organizations that develop and even host their own MLS system.   Without the sensitivities of the latest trends in product management, product development, data security and data hosting, MLS organizations are putting themselves at risk.  Their systems may fall behind those offered by other organizations or worse yet have security holes that could take the MLS system down and offline for significant periods of time.

I would love to see MLS organizations consider adding, at a minimum, an advisory board or multi-disciplinary professionals to bring outside perspective to important technology, growth strategies, customer support, marketing and financial management decisions.

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