NFRC in the News - Being Balanced

USGlass Metal & Glazing

December 2005

Point: The Importance of Being Balanced

By Jim Benney

Imagine a world without balance where you're never quite sure which way your world will tip. It's unsettling at best. Then imagine an unbalanced organization where one-sided parties get to make all of the decisions based on their own self-interests. That may work for other organizations or perhaps even some governments, but that world cannot exist within the NFRC.

I often hear people refer to NFRC as a trade association. Not true. NFRC is organized as a tax-exempt not-for-profit “scientific and educational” charitable corporation under Section 501(c)(3) of the Internal Revenue Code. As such, we are required to conduct our affairs in the public interest. In other words, our mission is not to promote any area of the industry. For NFRC to successfully operate in the public interest, it is imperative that a sense of trust exists in the NFRC name.

One way we encourages this trust is through the election of a balanced board of directors. In turn, it is the legal responsibility of the board to ensure that NFRC continues to follow its goals of:

•  Providing fair and accurate energy performance ratings for fenestration products (both residential and nonresidential);

•  Publishing ratings that help the public when selecting fenestration systems; and

•  Conforming to its charitable responsibilities.

This mission continues to be important as energy-efficient window techniques become more prevalent and the number of states requiring NFRC-certified products increases.

The Board of Directors

Since the birth of NFRC, our bylaws establish three general categories that make up the board of directors: the fenestration industry category (five seats); the lab category (one seat) and the general interest category (six seats). Because NFRC is a 501(c)(3) organization and not a trade or industry association, the board is weighted towards the general interest category. This appropriately balanced board helps assure that we continue to work for the public interest.

This year we had six open board seats and a large number of people designated for potential nomination from the membership. From this pool of talent the board reviewed the nomination disclosure questionnaires submitted by the designees and approved a slate of nominees for the various open categories. Each board category has specific definitions and criteria as written in NFRC's longstanding bylaws and it is the board's responsibility to place candidates in their proper categories. In this regard, each qualified candidate is placed in the specific membership category in which he or his affiliated organization belongs.

Once the nominations were approved in their appropriate categories, it went to the voting membership for election. (NFRC uses a Web-based voting system run by an independent third-party contractor to collect and tabulate the membership votes)

Once elected, directors must act only in the best interests of NFRC during their board service. This responsibility is subject to two primary obligations: a duty of care and a duty of loyalty.

“Duty of care” requires the director to act in a reasonable and informed manner when participating in board decisions and overseeing NFRC's management. Directors must be informed of the facts and circumstances relevant to upcoming decisions so that they can use reasonable judgment in making those decisions. This duty requires active participation in board duties and regular attendance at board meetings.

NFRC Always Comes First

The “duty of loyalty” is one of the most difficult, yet important, things we ask of board members. It requires individuals, when acting as a board member, to exercise their powers in good faith and in the best interests of NFRC, rather than in their own interest, their employer's interest or in the interest of any third party. Simply put – it's NFRC first, your own interests last. Board members must be very careful to avoid conflicts of interest, preserve confidential NFRC information until released to the public by NFRC and avoid engaging in a business opportunity for NFRC with any party with whom the director has a business or financial relationship.

I know it's sometimes hard to separate the interests of one's own organization from doing the public good, but it's crucial for NFRC's success. It's a fine line we all walk – one that requires selflessness, awareness, and most importantly, a constant focus on whom we serve: the public. In other words, a keen sense of balance.

Jim Benney serves as executive director of the National Fenestration Rating Council based in Silver Spring, Md.