A committee member of a Māori Incorporation found herself in a difficult situation recently. Considering herself to be honest and unbiased person, she was not worried by the fact that she had taken part in discussions before the committee regarding a proposal which could see her farm machinery business receiving a contract with the Incorporation.  It was clearly the most cost effective offer for the incorporation, so why should it matter?

It was subsequently brought to the Māori Incorporation’s attention that the procedure followed by the committee was in breach of its constitution.  This is because the undisclosed circumstances created a conflict of interest which needed to have been declared by the committee member.  Furthermore, as a result of the conflict of interest the committee member should not have taken part in the discussion or vote on the decision to award the contract.

The process exposed the Māori Incorporation to great risk.  In particular, if the decision was implemented by the Incorporation the committee faced the risk of the decision being challenged and overturned by the Māori Land Court.  It also placed the committee member at risk of being removed from the committee for breaching the rules of the constitution.

Fortunately, and after realising the error, the committee was able to rescind the original decision and restart the process from scratch.  In the circumstances the remaining committee members decided to exclude the proposal from the interested committee member to avoid any allegations of bias.

This example illustrates how crucial it is that all committee members are aware of and comply with the rules of the Maori Incorporation as set out in the constitution.

Failure to comply with the rules covered by the constitution can have drastic consequences.  The above situation could have been easily avoided by the committee members being familiar with the rules set out in the constitution.

If you have any queries about complying with your Māori Incorporation constitution please contact Peter Johnston on 0800 729 529.