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Young Maori Leaders Conference Economic Resources Governance

Young Maori Leaders Conference Economic Resources Governance. 17 June 2003 Guy Royal / Damian Stone. Introduction. Governance and management principles How these rules apply to M āori organisations Common structures used by Māori organisations Incorporation of tikanga Common issues.

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Young Maori Leaders Conference Economic Resources Governance

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  1. Young Maori Leaders ConferenceEconomic Resources Governance 17 June 2003 Guy Royal / Damian Stone

  2. Introduction • Governance and management principles • How these rules apply to Māori organisations • Common structures used by Māori organisations • Incorporation of tikanga • Common issues

  3. Preliminary comments • Structure vs Operations • Shakeholderism vs shareholderism • Accountability through structural detail • Accountability through • alignment of incentives • adequate performance analysis • other contractual matters • The ideal shareholder

  4. Separation of Governance and Management • Clear division between personnel • Clear division between responsibilities • Governance • board or executive • external focus • overall strategic direction • Management • internal focus • task oriented

  5. Rationale for Separation • Decision making powers do not go unchecked • Balance of power and authority • Transparency • Accountability • Responsibility

  6. Applicability to Māori Introduction • Best practice rationale applies to all entities • Māori organisations • commercial focus • wealth creation • wider objectives - social

  7. Applicability to Māori Governance Levels • At least four levels • Members – owners • Member representatives – represent members interests • Directors – strategy orientated and monitor performance • Managers – task and results orientated

  8. Applicability to Māori Rationale for Separation • Assists management of assets • Transparency and accountability • Ease of monitoring • Different governance levels have different resources/skills • Avoid potential conflicts in fulfilling different functions • Skills managers

  9. Applicability to MāoriRoles • Executive • set clear objectives for managers • monitor managers • report to members • Managers • more specific strategies • report to member representatives

  10. Applicability to MāoriStructures • Number of general options available • Ultimately up to individual group • Other criteria - Crown and TOKM • General criteria • member control • legal capacity and powers certain • separation of owners and managers • separation of commercial and non-commercial • consistent with tikanga

  11. TOKM Requirements • Two categories • Mandate requirements • Structural requirements • Summary of mandate requirements • Summary of structural requirements

  12. TOKM Requirements • Mandate requirements • Obligation to act for all iwi members, irrespective of where they reside • Membership open to whakapapa members • Right to request postal vote • Establish and maintain registers – “on-going efforts”

  13. TOKM Requirements • Mandate requirements (cont.) • AGM • annual plan • annual report • annual audited accounts • performance of asset holding entity • amendments • Certain amendments require 75% approval of voting members • Dispute resolution

  14. TOKM Requirements • Structural requirements • Accountability • Annual plans • key strategies • financial returns • rationalisations • Separation of key functions/transparency

  15. TOKM Requirements • Structural requirements (cont.) • Discrete legal entity to manage PRESA and POSA • Iwi organisation to provide strategic governance, which should be included in iwi organisation constitution • Elected reps. no more than 40% of directors of asset management body • Representative iwi organisation amend constitution of asset management body by 75% majority

  16. TOKM Requirements • Structural requirements (cont.) • Separation between asset management and distribution of funds • Separation between asset management and daily fishing management

  17. Crown Requirements • 20 questions • development of entity • representation of members • accountability • transparency

  18. Governance StructuresIntroduction • Some structures – not all • Brief discussion of advantages and disadvantages • Derive from Westminster system of law • Square pegs, round holes • Law Commission Report

  19. Governance StructuresCommon Law Trust • Established under common law • Flexibility in Trust Deed • Unclear trustee duties • Time consuming and costly • Finite period – rule against perpetuities

  20. Governance StructuresAhu Whenua Trusts • Established under TTWM Act 1993 • Avoid further fragmentation of Māori land • Land vested in trustees and benefits range of people • Arguably not fully representative of iwi • Uncertainty of trustee’s duties and powers • Replacement of trustees problematic • Under scrutiny and control of Māori Land Court

  21. Governance StructuresMāori Incorporations • Established under TTWM Act 1993 • Not truly representative of iwi • Uncertainty as to powers • Under scrutiny and control of Māori Land Court

  22. Governance StructuresIncorporated Societies • Established under Incorporated Societies Act 1908 • Well known and understood • Potentially not fully representative of iwi • Pecuniary gain issue • Membership • must register each beneficiary • contractual obligations • enforcement issues • Porima v Te Kauhanganui o Waikato Inc

  23. Governance StructureMāori Trust Boards • Established under Māori Trust Boards Act 1955 • Legally uncertain • Powers limited • Accountable to Minister of Māori Affairs rather than beneficiaries • Inconsistent with tino rangatiratanga

  24. Governance StructuresStatutory Bodies • Established by special legislation • Allows for iwi control • Clear, comprehensive and flexible • Passing of legislation can be costly, time consuming and requires government agreement • e.g. Te Runanga o Ngāi Tahu Act 1996

  25. Governance StructureCompanies • Established under Companies Act 1993 • Provides legal and commercial certainty • Strong accountability (e.g. shareholder protection) • Constitution allows for flexible, iwi specific structure • Financing and commercial powers • Difficulties in identifying shareholders

  26. Governance StructuresLaw Commission Recommendations • Treaty of Waitangi Claims: Addressing the Post Settlement Phase (Aug 2002) • Necessary for uniform model settlement entity to be created by statute • Must meet needs of settlement group and members • Should clearly define responsibilities of those managing assets

  27. Governance StructuresLaw Commission Recommendations • Core obligations that should be included • stewardship • transparency • accountability • dispute resolution • distribution rules in event of winding up

  28. Incorporation of Tikanga Māori • Structures traditionally derived from Westminster system of law – certainty (law) • Traditionally Māori governance structures today less certain (lore) • Tikanga varies

  29. Incorporation of Tikanga Māori • Possible conflict between tikanga Māori and governance structure rules • Tikanga can be incorporated into governance structures e.g. constitution / charter / Trust Deed • The more flexible structures allow for greater incorporation of tikanga Māori

  30. Incorporation of Tikanga MāoriExamples • Recognition of Tino Rangatiratanga and Kaitiakitanga • settlements allow for collective Māori ownership and management over tribal assets, land and destiny • settlements allow an iwi to hold assets and administer them as kaitiaki • duty to protect assets for future generations • can be incorporated into modern structures

  31. Incorporation of Tikanga MāoriExamples • Recognition of Whanaungatanga • whakapapa based • membership and participation of all members of kin group in the settlement process and governance structure • whangai

  32. Incorporation of Tikanga MāoriExamples • Recognition of Mana • political power ascribed through whakapapa and acquired through accomplishment • executive to make decisions subject to wishes of group • executive accountable to members • Kaumatua role

  33. Common Issues – Merging of Functions • Issues may arise if: • member representatives taking active role in management • directors become management • management become directors • Difficult to isolate responsbility • May not have appropriate skills

  34. Common Issues – Māori Specific • Resource availability • Difficult for people who have historically undertaken merged roles to separate functions • Tikanga • varies • can be incorporated into constitution etc • difficult to reduce concepts to writing

  35. Common Issues – Decision Making • How should decisions be made? • unanimity vs majority? • what majority? • what voting process? • hui vs postal vote? • preferential voting rights? • Kaumatua input

  36. Common Issues – Decision Making • Who should make decisions? • members control over overall direction • impractical to have members make all decisions • what decision should they have input into?

  37. Conclusion • Separation of management and governance is important • Structure will impact on successful management of assets • Ultimately people who work within structure have greatest influence over whether group is successful in managing assets

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