One of the nation’s largest MLSs recently voted in favor of a revamped board of directors that could make decision-making easier, eliminate the appearance of politics, and provide governance independent of competing agents and brokers in the state.
Arizona Regional MLS (ARMLS) shareholders and existing board of directors have approved changes to create an independent board of directors later this year. None of the new board members are licensed to practice real estate in the state.
The moves come as the industry’s various governance structures have come under intense scrutiny from state and federal regulators and lawyers who appear intent on filing class-action lawsuits targeting past rules and regulations.
The new board will have sole discretion to make decisions regarding the organization’s policy, legal, and financial matters. ARMLS CEO Matt Consalvo told Inman in an interview about the changes that an advisory group that includes practicing agents and brokers will review comments and provide advice.
Other MLSs are likely discussing similar changes. Here’s how things will play out in Arizona:
Inman: How long has this been in development?
Consalvo: We started by asking ourselves, is there a better decision-making model? Let’s go back to 2012. We have made several governance changes over the years.
But it wasn’t until February of 2025 that we seriously asked ourselves, given the need for MLSs to be more agile and business-focused than ever before, and given all the scrutiny the industry is facing, is there a better decision-making model?
What’s the biggest change here?
The traditional MLS board of directors established in our industry over the past 60 years is still preserved. They are shareholder advisory committees. What they don’t have is a fiduciary responsibility to the company.
When it comes to making legal, fiduciary, or policy decisions, they may have opinions they would like to recommend to the board, but it is the board, under the guidance of general counsel and other advisors, who makes those decisions.
Why move away from broker-driven decision-making?
I think it’s a better decision-making model to take that decision out of the hands of a competitor who has the opportunity to use an intermediary and earn a commission, but in the hands of someone knowledgeable about the industry when it comes to that decision.
We don’t want people who don’t understand the deal. We seek advice and guidance from agents, brokers, and shareholders, as well as industry knowledge to help us make the best decisions for our MLS.
In a sense, it takes politics out of the boardroom, or even the possibility of politics, right?
Yes, that’s right. Above all, the perception of politics in the eyes of the plaintiff’s lawyer.
How much of this is about legal research?
It didn’t start like that. It started with what is the best decision-making model. But we’ve reached a point where we understand that leading up to and into 2025, MLS is under more scrutiny than it has been in the last 10 or even the last 50 years. Perhaps providing data and involving non-participants in decision-making is good decision-making hygiene.
It certainly looks better in the eyes of those who want to poke us. The basis of why we did this is because we realized that decision-making in MLS was moving faster than we had ever seen it before.
Will this become a trend?
I think large MLS executives are asking themselves if this is a good idea.
I think we’ve seen some subpoenas, we’ve gotten some questions from other people, and some people have teased us with things like, “Your board is made up of only big brokers, your board is made up of only small brokers.”
The composition of the board of directors has received considerable attention. What we want to do is stop this smokescreen and red herring conversation and get back to great decisions. So I think there are other people out there who are having conversations.
You mentioned subpoenas, but what’s going on there?
It doesn’t refer to anything specific. I think some of the people who come into our industry want to go fishing right now. They get judges to sponsor and approve these pretty broad subpoenas.
Can you think of other examples where agility would be helpful, but you didn’t have the ability to act quickly?
We have never been held back by our inability to act quickly to call special meetings or request people to gather for things. At ARMLS, we are a very sensitive and very progressive group. So it never stopped us from doing what we wanted.
It’s easier to get five or six people involved in a strategic topic that spans three, four, or five years than it is to get 18 people involved in the same conversation with terms that expire quickly and rotate in and out of the room.
For someone who has worked a lot with associations, it is disappointing to see that strategic goals can last for three years, but one-third of the leadership changes every year.
What do you mean when you say some upcoming decisions may be unpopular?
Over the next few months, we’ll have to make the distinction between being unpopular with some demographics and unpopular with others.
Is this an immediate migration?
We’re not going to press the big red button and blow everything up and come out looking completely different in August. We are intentional. We are architects, not firefighters.
We have a transition plan that will take a year and a half, maybe two years, and we will transition in such a way that we don’t erase all historical knowledge at once.
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