As tribal business portfolios expand, so do the complexities in determining the right organizational and reporting structures. A pressing question arises: Should a business board or a separate tribal corporation be created? Understanding these structures is crucial for leveraging business opportunities while maintaining legal and governmental separation.
The Importance of Business Boards
The role of a business board extends beyond advisory capacities; it serves as a protective layer for tribal governments by ensuring liability and risk mitigation. Panelists in a recent discussion at Raving NEXT shared their insights on the structure, benefits, and best practices for business boards within tribal enterprises.
Jennifer Hines, Deputy CEO of Medicine Creek Enterprise Corporation, emphasized that a well-structured business board creates a legal barrier between the tribe and its business entities. This separation ensures that liabilities affecting corporate entities do not extend to the tribe’s assets. She noted that proper structuring within tribal laws and policies is fundamental for sustainable business growth.
Structuring for Long-Term Success
Amy Minniear, Tribal Treasurer of the Pechanga Band of Indians, highlighted the need to begin with a long-term vision. According to Minniear, tribal councils and business leaders should not only focus on immediate returns but consider the economic landscape for future generations.
“You don’t want your council to run everything,” she explained. “They should focus on growing the tribe, while a separate business board handles economic development.”
Chris Keenan, Vice-Chairperson of the Board of Directors at Tribal One, echoed these sentiments. She stressed that tribal councils often feel the need to be directly involved in economic development but should instead focus on setting long-term strategies. A clear delineation of duties allows business professionals to execute plans effectively, ensuring growth without political interference.
Boards vs. Committees: Defining Roles
A common question that arises is whether a business board or a committee is more suitable for oversight. Hines explained that business boards function as full-time working entities responsible for strategic decision-making, while committees generally serve as advisory bodies with limited engagement.
“Our board meets every two weeks and works continuously,” Hines noted. “They make critical business decisions and serve as the bridge between enterprises and the tribal council.”
Minniear added that committees can play an essential role in tribal governance but should not replace boards when it comes to managing multi-faceted enterprises. Engaging the membership in discussions about economic sustainability fosters transparency and long-term success.
Challenges and Solutions
One of the key challenges identified in the panel was the lack of communication and trust between business boards and tribal councils. Without clear policies, accountability, and reporting structures, misunderstandings can arise, leading to inefficiencies.
To mitigate these issues, Hines recommended structuring policies meticulously within tribal law. “A code or statute should serve as the foundation, but it must also be adaptable as circumstances evolve.”
Minniear shared a practical approach employed by Pechanga: a Fiscal Impact Statement (FIS) policy. This policy requires that any major project undergo thorough financial analysis, ensuring transparency and accountability. The FIS must be signed by financial officers and tribal leaders, ensuring collective responsibility.
Reporting Structures and Performance Indicators
The panel also discussed the importance of proper reporting structures for executives. Ideally, general managers and CEOs should report directly to the business board rather than the tribal council. Keenan pointed out that maintaining this separation prevents political influence from interfering with business operations.
Minniear emphasized the role of financial officers in bridging communication gaps. “Finance teams are inherently less political and should meet regularly to ensure alignment between business goals and tribal financial sustainability.”
Long-Term Investments and Future Considerations
The discussion concluded with advice for tribes looking to build long-term economic stability. Minniear and Keenan both advocated for establishing investment funds early, noting that institutional investing changes the mindset of elected officials from short-term budgeting to generational wealth-building.
“Being an investor shifts the focus from immediate budget concerns to sustainable growth,” Minniear explained. “If we had started our investment funds 20 years earlier, we would be in an even stronger position today.”
Final Takeaways
The panelists shared valuable insights for tribes navigating economic development. Key takeaways included:
- Legal structuring is essential to protecting tribal assets.
- Clear delineation of roles between business boards and councils fosters efficiency.
- Regular financial oversight ensures transparency and accountability.
- Long-term investments should be a priority for sustainable economic growth.
By implementing these best practices, tribes can position themselves for economic success while safeguarding their sovereignty and assets. Business boards serve as crucial instruments in achieving these goals, provided they are structured effectively and supported by strong governance policies.
As tribal enterprises continue to grow, ensuring the right organizational framework will be fundamental to maximizing opportunities and securing prosperity for future generations.
