CMM Professional Ethics & Standards Flashcards

Which organization administers the Certified Mineral Manager (CMM) designation in the United States?

Answer: National Association of Royalty Owners (NARO)

The National Association of Royalty Owners (NARO) administers the CMM certification program to establish professional standards for mineral managers.

Under the CMM Code of Ethics, what is a mineral manager's primary obligation when representing a client?

Answer: To act in the client's best interest with loyalty, competence, and full disclosure of material information

The CMM Code of Ethics requires mineral managers to place the client's interests first, perform services competently, and disclose all material information that affects the client's decisions.

What action must a CMM take upon discovering a conflict of interest between two clients they represent?

Answer: Disclose the conflict to both clients and obtain informed consent, or withdraw from representing one or both clients

The CMM Code of Ethics requires full disclosure of any conflict of interest to all affected clients, and if informed consent cannot be obtained, the mineral manager must withdraw from the conflicting representation.

Which of the following would constitute an ethical violation for a CMM under NARO's standards?

Answer: Purchasing a mineral interest from a client without full disclosure and fair dealing

Purchasing a mineral interest from a client without complete transparency and fair dealing violates the CMM's fiduciary duty and creates an impermissible self-dealing conflict of interest.

A CMM who lacks expertise in a specific aspect of a client's mineral management needs should:

Answer: Disclose their limitations and refer the client to a qualified specialist

Competency standards require a CMM to recognize the limits of their expertise, disclose those limits to the client, and refer the client to appropriately qualified professionals.

How long must a CMM typically retain client files and correspondence under professional standards?

Answer: For the duration of the engagement plus a reasonable period thereafter, often consistent with the applicable statute of limitations

Professional standards require retaining client records for the engagement period plus additional time aligned with applicable statutes of limitations to protect both the client and the mineral manager.