Why an Economic Development Corporation? • Vision and Mandate • Legal overview • Structure • Functions- HR, operations, finance, marketing, and governance • Board strategy • Link to lands management Why a Development Corporation? • Systematically remove barriers to development • Is a structure for accessing business opportunity • Structure to manage business, projects and distinguish from the FN Government • Separate risk from the FN

1. Links to Learning
Starting a First Nation’s Economic Development
Corporation Workshop
December 18th, 2013 8 am 11 am
Westin Bayshore
By Transformation: Social and Economic Development
Carol Anne Hilton, MBA
For AFOA BC

2. Outline
• Why an Economic Development Corporation?
• Vision and Mandate
• Legal overview
• Structure
• Functions- HR, operations, finance, marketing, and
governance
• Board strategy
• Link to lands management

3. Why a Development
Corporation?
• Systematically remove barriers to development
• Is a structure for accessing business opportunity
• Structure to manage business, projects and
distinguish from the FN Government
• Separate risk from the FN

4. The Development
Corporation
• Is a vehicle that communities create in order to
travel toward a destination
• Corporate/business approach- instead of
program/services
• Means to access business funding- capital/equity

5. The Development
Corporation
• EDCs are the economic and business
development arm
• Responsible for developing a Strategic Plan, and
approving annual business plans and budgets
consistent with the Strategic Plan.
• The Board also approves new business ventures,
contracts and major financial transactions

6. Continued
• Support of new and existing economic
development projects and businesses
• Increase investment readiness
• Increase engagement with outside partners and
organizations
• Container for development
• Pivotal point of business relationships
• Entry point for industry participation

7. Example: White Cap Dakota
• Economic Mission
•
“To create an economically self-sustaining
community with financially independent members
through the effective use of economic tools that
maximize the available resources, respect the
Dakota culture and protect the environment while
protecting and enhancing inherent rights.”

8. Example: Na Cho Nuk Dun
First Nation
• The primate mandate of NND Development
Corporation as the primary business arm of the NND
Government is to maximize NND‟s economic interests.
This will be achieved through investment and
development in three solid industries:
• ■ Mining/Reclamation – utilizes and maximizes existing
resources effectively and efficiently while developing skills
and technology throughout North America. ■ Renewable
Energy – is a growth industry of hat NND is in a perfect
position to capitalize on. ■ Real Estate – proven track
record of cash flow and equity preservation.

9. Vision Statements
A vision is:
• Often confused with mission, goals, statement of
purpose, and other terms used by organizations.
• The preferred future, a desirable state, and ideal
state
• A general statement encompassing the direction
an organization wants to take and the desired end
result once it gets there. It is the vision of what
those involved what their organization to become
or impact it will have

10. Vision Checklist
• Provides the necessary framework within
which business planning occurs
• Tells how to see the future
• Sets out the desired destination
• Remember simplicity is best!
• Embrace key values of the
organization/community
• Focus on key words and outcomes

11. Vision Examples
• Enhance and strengthen the Long Plain
First Nation economic base and meet the
employment and economic needs of its
citizens.
• We, the Champagne and Aishihik First
Nations people and our government, shall
promote a healthy, unified and self-reliant
people, while conserving and enhancing
our environment and culture.

12. Vision Samples (cont’d)
• To achieve self-reliance through economic
development and to preserve the First Nation
culture through the creation of jobs on our
lands for future generations – Osoyoos Indian
Band
• To create economic opportunities and develop
business initiatives and partnerships for the
primary benefit of our First Nation
communities both on and off reserve Wasaya Group, A Native Venture Corp.

13. Vision Samples (cont’d)
• To initiate, develop and manage business
opportunities which are compatible with
Cowichan Tribes culture and heritage.
KDC shall strive to maximize long term
profitability to support economic
development and capacity building to be
full participants in the local, regional and
national economy – Khowutzun
Development Corporation.

14. Vision Samples (cont’d)
• The Burns Lake Native Development
Corporation will empower member First
Nations to realize their economic aspirations
within their traditional territories – Burns Lake
Native Development Corporation.
• To create a strong and diverse tourism and
business climate for the economic and social
benefit of the people of Nocona and its
surrounding areas.

15. Core Business Functions
• 1) HR
• 2)Administration/operations
• 3) Finance
• 4) Marketing
• 5) Governance

16. Human Resource
Management
• Develop a long-term strategy for recruitment and
retention.
• The board and the senior management team must
recognize that human resources is a primary
focus for the organization.
• This includes Corporation staff and recruitment of
Board members.

17. Pyramids of Reporting
Community
Directors
Board
Corporatio
n CEO
Managers
Employees
Partners/Clients

18. Board vs. Staff Role
Board
Staff
Provides strategic
direction
Recruits and
manages senior
staff person
(Corporation CEO)
Sets the vision and
Mission
Supports Board in
planning
Recruits and
manages
Corporation staff
Implements the
Corporation‟s
strategic and
operational plans
Implements
operational plan and
oversees budget
Monitors outcomes
and performance

19. Financial Models
Types of transactional models:
1. Fixed annual payments
2. Royalties based on outputs
3. Royalties based on value of outputs
4. Profit based royalties
5. Equity participation of shareholders

20. Wealth Management
• Wealth management is an investment advisory
process that incorporates financial planning and
investment portfolio management
• Wealth management calls for credentialed
financial advisory - to coordinate retail banking,
estate planning, legal resources, finance and tax
professionals and investment management to
maximize wealth
• The emerging „high net Nation‟

21. Wealth Management
• First Nations are moving from the
„underdevelopment of reserves‟ towards wealth
management through economic development and
legal frameworks
• Nation building and wealth management are
parallel processes
• need to manage investment risks, the need for
sound financial advice, and a solid financial for
First Nation governments.

22. Governance-Key Roles of the
Board
• Providing strategic direction to the organization
• Manage the Senior staff person of the Corporation
• Monitor performance
• Risk identification and oversight
• Governance systems and processes

23. Signs of good governance
• Accountability and Transparency
• Legitimacy and Voice
• Direction
• Performance
• Fairness

24. Risk Management
• The process of risk management is a simple
three-part activity. It involves:
• looking at a situation and asking what can go wrong
and what harm could result;
• identifying practical measures that can be taken to
keep such harm from occurring; and
• if harm does occur, identifying practical measures
that can be taken to lessen the impacts of harm and
pay for any resulting damage or losses.

25. Recruiting the Board
• Organization, Mission and Values
• Values
• Desire
• Availability
• Complementary
• Motivation

26. Selecting Directors
• Ensure a broad talent pool
• Diversify board membership
• Develop a matrix of potential Directors
• Revolving succession list
• Ensure bylaws have a turnover requirement
• Regular and ongoing evaluation
• Clear expectations of Directors

27. Competencies of
Directors
• Knowledge, experiences
• Relationships and connections
• Aligned with values and culture of the organization
• Familiarity with Governance/Boards
• Committed, can deal with role dichotomy

28. Recruitment Role of Boards
• Recruit and retain senior staff person to run the
corporation
• Manage the CEO/Senior Manager
• Support training and development
• Ongoing performance evaluation of Senior
Manager
• Two-way communication

29. Legal Overview
• There are many types of business entities defined
in the legal system•
These include corporations, cooperatives,
partnerships, sole proprietorships and limited
liability companies

30. Continued
•
Builds strong relationships with members, clients and other key
stakeholders
•
 Actively involved in Strategic Planning
•
 Implements systems and controls to safe guard finances
•
 Selects, supports, advises, evaluates and terminates the Executive
Director/CEO
•
 Provides and develops institutionalized accountability structure
•
 Focuses on results and impact of its services
•
 Makes objective and independent decisions based on solid
information

31. Legal Overview
•
DIFFERENT CORPORATE STRUCTURES
•
Non-Indigenous Companies
• Shareholders
• Directors
• Officers
•
Indigenous Companies
• How do they from non-indigenous companies?
• Community members
• Chief and Council
•
Partnerships
• What types of partnerships are there?
• How do they differ from each other?
•
Parent Entities
• What are they and when do you need them?

32. Continued
•
WHEN AND HOW TO CHOOSE A STRUCTURE (Compare/Contrast)
•
Only incorporate if you have a deal!
•
Protection from Liability
• Liability of People (Owners, Chief and Council, Directors)
• Asset Protection & Profit/Loss: Who bears the risk?
• Case law
•
Tax Considerations
• On-reserve vs. off-reserve
•
Management and Control
• Reporting, participation, changes, business planning
•
Complexity and Cost

33. Foundation of Formal
Partnerships
• Letters of Agreement
• Partnership Agreement
• Contracts
• Shareholders Agreement
• Society Constitution

34. Role and Responsibility
•
BUSINESS ASSETS = COMMUNAL ASSETS
•
Chief & Council have a fiduciary duty to manage
communal assets
•
“Separation of Business and Politics” – What does this
mean?
•
Chief and Council involvement/control – striking a balance
• Role of Board of Directors
• Role of Chief and Council

35. Continued
• Communications: Board -- Chief and Council -- members
• Members of Council on Board of directors
• Formal reporting obligations
• Advisory committees
• Legal structure to meet governance goals
• Shareholders
• Directors
• Articles – tailoring corporate governing documents to
meet indigenous company needs

36. Key elements of starting an
Ec Dev Corp
•
Issues to be considered
•
Defining goals and objectives of the process
•
Determining milestones or targets with timelines
•
How to add an issue/factor
•
Sharing of information
•
Dealing with media
•
Designation of roles
•
Involvement of legal counsel, financial advisory or technical advisors
•
What happens without agreement
•
Decision making framework
•
Conflict management

37. Example of Key
Questions
• What interests are present?
• What issues are being considered?
• How will the parties access information?
• How will the parties deal with external interests?
• How will the agreement be defined?
• How will the cost of the process be met?

38. Key Elements for Agreement
–Process Initiation
• Identify purpose of process- goals and interests
• Identify necessary Commitments
• Who needs to be involved?
• How will decisions be made?
• How should the process be structured?
• How will activities be established- record keeping, agendas?
• Conduct of discussions
• How to prioritize projects

39. Board Strategy
• Approve the vision and mission
• Engage in planning
• Identify and weigh risks
• Approve the plan and strategies
• Oversee and monitor plan implementation
• Monitor performance of organization

40. Board continued
•
Determine a governance model and ensure that appropriate organizational policies and
structures are in place
•
Participate in the development of a mission and strategic plan for the organization
•
Hire and ensure that an effective management team is in place (i.e., Executive Director)
•
Maintain effective partnerships and communication with the community, the organization's
members and its stakeholders
•
Maintain fiscal responsibility, including raising income, managing income, and approving and
monitoring annual budgets
•
Ensure transparency in all communication to members, stakeholders and the public
•
Evaluate the organization's work in relation to a strategic plan
•
Evaluate the work of the board of directors, ensuring continuous renewal of the board, and
plan for the succession and diversity of the board

41. Continued
• Contracts
• Proposals/grants – funding agreements
• Leases/rentals/ agreements
• Insurance - Get a copy of your Directors and Officers
Liability insurance policy, your Comprehensive
Insurance policy, or any other insurance policies and
read them.
• Organizational Calendar - Make a note of any
deadlines or renewal dates and add them to your
Organizational Calendar

42. Directors
•
Act in the best interests of the organization
•
Understand the roles and responsibilities of being a board member
•
Be familiar with the organization's bylaws, policies and procedures, strategic plan, mission,
etc.
•
Ensure he/she avoids conflicts of interest including operating in the best interest of the
organization not in self-interest or the interest of a stakeholder group
•
Respect confidentiality policies that pertain to membership and board discussions
•
Keep informed about the organization's financial activity and legal obligations
•
Bring his/her own skills, experience and knowledge to the organization
•
Attend board meetings regularly and arrive prepared for meetings
•
Support board decisions once they have been voted on

43. Types of Policy
Board decision-making and meeting practices (usually covered partially by by-laws)
•
♦ Conflict of interest
•
♦ Board member conduct
•
♦ Role, responsibilities, and authority of the executive director or CEO
•
♦ Financial management
•
♦ Personnel, hiring and other human resource practices
•
♦ Treatment and protection of consumers, customers, clients or users
•
♦ Fundraising (including ethical considerations)
•
♦ Advocacy and public education
•
♦ Accountability to members, stakeholders and community (may be partially addressed by laws in
references to annual general meeting and annual financial report)
Operational Policies Some organizations also try to distinguish between board or governing policies and management or
operational policies. Also use Comprehensive Community Plan and Land Use plan as guiding documents for development

44. Organizational Binder
•
Creating an organizational binder keeps all your important information in one place for easy reference
and tracking and contains:
•
Governing statute – incorporation papers - Certificate of Incorporation
•
Key dates - note of any deadlines or other important dates in your Organizational Calendar.
•
Policies and practice – bylaws
•
Minutes of board meetings
•
Minutes of AGMs
•
Minutes of committees
•
Financial affairs - annual budget , your audited financial statements, and , monthly or quarterly financial
statements you receive as a board member. -Notes your organization‟s major sources of revenue. Notes your
organization‟s major expenses. Note your organization‟s debts.

45. Example WEDC
• Example- The Wuikinuxv Economic Development
Corporation, Wedco, is owned by the Wuikinuxv Nation and
its purpose is to foster economic development for the Nation
and its members.
• The corporation is structured as an independent business
that operates at arm‟s length from the influence of Wuikinuxv
council and administration.
• The shares of the Corporation are held in trust by a set of
trustees which are composed of Wuikinuxv members
appointed by Wuikinuxv Council.
•
The trustees appoint the board of directors that manage the
corporation.

46. • Thank you!
•
•
•
•
•
Please contact Carol Anne Hilton at
250 508 1778
cawaaknis@me.com
www.transformationinternational.ca
Twitter @Hesquiaht