By Benjamin Nuvamsa
Much has been written about tribal sovereignty and tribal sovereign immunity; and the unique nation-to-nation relationships between the federal government and tribal nations. Some tribes have successfully and strategically used their sovereign status in developing their economies while other tribes struggled.
Tribal governments, like all governments, often have difficulty in running businesses. Political motivations creep into corporate decision-making and hurt the long-term prospects of corporate operations. Tribal politics and interference by tribal councils are often the leading causes of failing tribal enterprises. That may even result in inadvertent compromise of tribal sovereign immunity protection. Thus, effective relationships and separation of powers between tribal councils and their corporate boards are very important factors to successful tribal enterprises.
Tribal-owned enterprises can play an important role in developing tribal nations. Many view privatization of tribal enterprises or separating tribal enterprises from tribal governance as the best way to reclaim economic value. Some, however, view enterprises established under the umbrella of tribal governments as the best way to protect and invoke tribal sovereignty.
Tribal enterprises are distinct in their governance in several ways: tribal enterprises are “public” companies that should have a corporate governance that equal to, or exceed those of privately-held companies; tribal enterprises are vulnerable to political interference and lack of transparency; and many pursue commercial and social policy objectives, often distorting incentives for company profit and growth objectives.
Tribes should consider adopting the following principles for their enterprises:
Creating government stability and continuity: Create a process of selection, and appointment of corporate boards based on members’ experience and expertise (instead of political affiliation); protect board member tenure; and ensure there is a shared or common vision between the tribal council and the corporate board.
Separating business and politics: Set up a proper governmental structure, separating politics away from business; and provide for clearly defined roles between the tribal council and corporate boards that are reflected in corporate documents, such as by-laws.
Developing proper corporate structure and strategy: Create an appropriate type of enterprise that best serves the tribe and maximizes a tribe’s sovereignty, whether it is a Section 17 chartered corporation, a tribal chartered corporation or a state-chartered corporation.
Coordinating tribal resources: Develop a holding company or a non-profit corporation that will coordinate a reservation-wide economic development strategy to provide for stability in light of constant changes in the tribal government.
About KIVA Institute LLC
KIVA is a 100 percent Native American owned and operated training and consulting company dedicated to “Building Capacity in Indian Country.” It has unique knowledge and experience in the Indian Self-Determination Act. It has practical experience in how tribal governments operate.
KIVA provides training and consulting services in the areas of finance and accounting, indirect costs, audit preparation, indirect cost rate proposals, grant writing, contract and grant management, management and supervision, strategic planning, tribal council and board roles and responsibilities, Robert’s Rules of Order, Indian law, economic developing and development of renewable energy resources.
Benjamin Nuvamsa, former chairman of the Hopi Tribe, is founder and president/CEO of KIVA. Nuvamsa was the primary official who developed the regulations and training to implement the Indian Self-Determination Act for the Bureau of Indian Affairs.