Governance of your Iwi organisation – do you have too many arms?

Sometimes, organisations can find that as they develop over the years they can lose track of the number of ‘limbs’ they have.  This can particularly be the case for Maori entities, who may enter into the post-settlement phase finding that they have number of different entities doing different things.

This can make it difficult for the left hand to know what the right hand is doing.

This was the position an iwi recently found itself in. Nearing a settlement of its Treaty claims, the iwi wanted to combine its three separate charitable entities into a single charitable trust.  The purposes of the three trusts were not identical, but were very similar.

In July 2012, the trustees of the three trusts sought approval from the High Court to start the process of combining the trusts.  The trustees wanted to then call a special general meeting to ask for the approval of the whole iwi.

The trustees were concerned about the administrative difficulties involved in operating three separate trusts.  They were particularly concerned about compliance costs under the Charities Act 2005, as well as making investment and distribution decisions that benefitted the whole iwi.  Each of the three trusts was required to keep separate financial records and to prepare separate financial statements, which created unnecessary administration costs.  They made their investment decisions in isolation, which meant unnecessary investment risks to the iwi as a whole.  Also, each trust had its own database of iwi members, which was confusing and frustrating for iwi members who had to register with each trust separately.

The High Court agreed with the trustees that combining the trusts would help them better carry out the trusts’ charitable objects, and ordered that the trustees could hold the special general meeting to seek approval from the iwi.

If you feel that governance of your organisation is getting out of hand, it is worth seeking advice about whether you can streamline your processes.  This may be as simple as amending your trust deed or even just your policy documents.  If you do need to go to the High Court, it may be worth it in the long run if you are able to minimise risks and leverage a wider asset base.

It is also worth noting that some Maori organisations are subject to the different legislation, like the Maori Trust Boards Act and Maori Fisheries Act.  If this is your situation, you would be wise to take professional advice before changing your arrangements to make sure that you comply with the statutes.

For a relaxed initial chat about your organisation, call us on 0800 729 529.