The Certification Committee is made up of Carolinas-Virginia MSDC Corporate Members (no MBEs are on this committee). The Committee’s role is to analyze and evaluate each applicant against national NMSDC Certification standards, then make recommendations to the Board of Directors for applicants to be certified that meet the appropriate standards.
What does the Certification Committee look for in an application?
Answer: The Certification Committee is looking for legal ownership structure, involvement in the day-to-day management and operational control. Normally, the ownership structure and managerial control are straight forward with questions concerning operational control issues.
The “ethnic minority” must be a U.S. citizen who is an African-American, Hispanic-American, Native- American, Asian-Pacific American or Asian-Indian American. “Ownership” by an ethnic minority individual means the business is at least 51% owned by such individuals or, in the case of a corporation or a Limited Liability Company, such individuals own at least 51% of the shares or units and shall have numerical control of the corporation’s Board of Directors or the LLC’s Board of Managers.
The ethnic minority owners shall possess the title(s) and power to direct or cause the direction of the management and policies of the business and to make independent, unilateral day-to-day business decisions as well as other major decisions on matters of management, policy, and operations.
The business shall not be subject to any formal or informal restrictions, for example, by-law/operating agreement provisions, partnership agreements or Charter requirements for cumulative voting rights or other arrangements that prevent the ethnic minority owners from making a decision for the business “without the cooperation or vote of any owner who is not a minority.”
In summary, the “certifiable MBE” must demonstrate operational and managerial control of the firm and its Charter Board (e.g., Board of Directors for a corporation or Board of Members/Managers for a Limited Liability Company). This control shall “be real, substantial and continuing and shall go beyond the pro forma ownership of the business as reflected in the ownership documents. If the owners of the business who are non-minorities are disproportionately responsible for the operation and management of the business, then the firm is not controlled by minorities and shall not be considered a certifiable MBE.”