CMM CMM Professional Ethics & Standards 1 — Questions and Answers
Question 1: Which organization administers the Certified Mineral Manager (CMM) designation in the United States?
- National Association of Royalty Owners (NARO) (Correct answer)
- American Association of Professional Landmen (AAPL)
- Society of Petroleum Engineers (SPE)
- Independent Petroleum Association of America (IPAA)
Correct 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.
Question 2: Under the CMM Code of Ethics, what is a mineral manager's primary obligation when representing a client?
- To act in the client's best interest with loyalty, competence, and full disclosure of material information (Correct answer)
- To maximize production volumes regardless of the lease terms
- To prioritize the operator's development timeline over the mineral owner's preferences
- To maintain confidentiality even when disclosing information is required by law
Correct 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.
Question 3: What action must a CMM take upon discovering a conflict of interest between two clients they represent?
- Disclose the conflict to both clients and obtain informed consent, or withdraw from representing one or both clients (Correct answer)
- Favor the client with the larger mineral estate without disclosure
- Continue representation without disclosure to avoid alarming either client
- Report the conflict only to NARO and take no further action
Correct 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.
Question 4: Which of the following would constitute an ethical violation for a CMM under NARO's standards?
- Purchasing a mineral interest from a client without full disclosure and fair dealing (Correct answer)
- Advising a client to audit an operator's production records
- Recommending that a client consult an attorney on a complex title issue
- Disclosing publicly available lease terms to a prospective client
Correct 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.
Question 5: A CMM who lacks expertise in a specific aspect of a client's mineral management needs should:
- Disclose their limitations and refer the client to a qualified specialist (Correct answer)
- Proceed with the work and research the topic without informing the client
- Decline the entire engagement without offering any referral assistance
- Charge a reduced fee and attempt the work outside their competency
Correct 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.
Question 6: How long must a CMM typically retain client files and correspondence under professional standards?
- For the duration of the engagement plus a reasonable period thereafter, often consistent with the applicable statute of limitations (Correct answer)
- Only for the calendar year in which the services were rendered
- Indefinitely regardless of the nature of the engagement
- Until the client requests their destruction in writing
Correct 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.
CMM CMM Professional Ethics & Standards 1
Which organization administers the Certified Mineral Manager (CMM) designation in the United States?