Governance Māori Qualifications
Review
Draft Needs Analysis
Project Management Team
Te Wānanga o Aotearoa /
NZQA Māori Qualification Services
June 26, 2012
1
Broad Context
The Māori economy
The Māori economy is made up of all individuals, households, businesses and collectives
that self-identify as Māori.&This includes Māori entrepreneurs active in individually owned
businesses or small to medium enterprises, as well as the contribution of Māori employees’
earned incomes.
While the Māori economy is highly integrated into the New Zealand economy, there are
features, such as demographics, cultural values and traditional knowledge, which make the
Māori economy different.
Unique strengths of the Māori economy
There are a number of features unique to the Māori economy, including:
 The Māori population is young and is predicted to grow by 20% over the next fifteen
years from 2011 to 2026.&In the future, Māori will make up a larger proportion of the
workforce.&To realise this potential, Māori need to be equipped with necessary skills and
education, which enable them to participate in New Zealand’s future workforce.
 Cultural values are a unique feature of the Māori economy with the potential to influence
growth.&Māori culture generates assets, such as skills and products, as well as insights,
which contribute to the social, environmental and economic well-being of not only Māori
communities, but the whole economy.
 The intergenerational focus of iwi and Māori collective organisations and the fact these
organisations have strategic goals, which encompass a multiplicity of outcomes.&Iwi and
Māori business collectives may also be more inclined to focus their portfolios on
domestic assets and enterprises located in their rohe or areas of influence.
Māori asset base
BERL (2010) research estimates the size of the asset base, income, expenditure and GDP
of the 2010 Māori economy was at least $36.9 billion in asset value.&Much of this value lies
within privately-owned Māori business enterprises, highlighting their important role in
influencing the growth of the Māori economy.
 Māori enterprises are estimated to have generated more than $10.3bn in value added in
New Zealand.
 The $10.3bn represents 5.9 percent of the total value added arising from all enterprises
in New Zealand.
 Within the $10.3bn value added from Māori enterprises, nearly $1.2bn is attributable to
Māori enterprises in the agriculture, forestry and fishing industries, with a further $1bn in
manufacturing (including food processing) sector.
Future potential for growth in the Māori economy is reliant on factors such as the improved
use of the asset base and up-skilling of the current and emerging Māori labour force.
Māori skills base
In order to ensure Māori are well positioned to benefit from the changing and increasing
opportunities the current economy presents, it is necessary to consider ways to grow or lift
the Māori skills base.
Improving the quality of labour is recognised as a key step to improving
productivity.&Furthermore, according to the New Zealand Treasury, improving the education
and skills of Māori people will provide the most significant contribution to Māori economic
development over the next 20 years.&
This highlights the importance of increasing the skills base, to ensure that Māori are in the
workforce, maximising their role within it and enjoying the benefits.
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Lifting the skills base will also help to ensure Māori are best positioned to benefit from
present and future opportunities, which are anticipated.
Improving the Māori skills base
The current position of Māori demonstrates that there is room for significant improvement in
terms of lifting the Māori skills base.&The Department of Labour (2012) has identified that:
 The labour force participation rate for Māori stood at 66.3% for the year to March 2012,
which represents a 0.1 percentage point increase over the past year and a 0.8
percentage point decrease over the past five years.&Compared with the participation
rate for all people, which was 68.4% in the year to March 2012, the Māori rate has
increased less sharply over the past year.
 The unemployment rate for Māori was 13.3% in the year to March 2012, which was -0.7
percentage points below its level a year ago, and 5.4 percentage points higher than its
level five years ago.&Compared with the unemployment rate for all people, which was
6.6% in the year to March 2012, the Māori rate has decreased more sharply.
 The “Not in Education, Employment Training” (NEET) rate is a key measure of youth
disengagement.&Among 15-24 year olds, in the year to March 2012, 17.6% of Māori
males and 27.5% of Māori females were NEET, compared with 11.5% of all males and
14.6% of females in this age group.
 In the year to March 2012, the leading industries in which Māori worked were
manufacturing (38,100 workers) and wholesale & retail (28,800 workers).&
 Over the last year, transport, warehousing & communications had the largest gain in
Māori employment (up 12%), while other services had the largest loss in Māori
employment (down 11%).
 Over the last four years, public administration and safety experienced the largest gain in
Māori employment (up 70%), while wholesale & retail had the largest loss (down 22%).&
 In the year to March 2012, the most common occupational groups for Māori were
labourers (54,200 workers) and professionals (42,000 workers).
A highly capable and skilled Māori workforce with related opportunities generated by
enterprises and collectives is critical to be able to participate productively in the
economy.&People with the right technical and business skills are then, essential for
companies to innovate, maintain competitiveness and attract new capital.
Māori participation in education
There is a strong link between higher level qualifications and potential earnings.&Investing in
skills and training provides an opportunity to improve the historical legacy of low qualification
levels, which has an adverse effect on Māori employment during periods of economic
volatility (such as the current economic recession).
Māori have shown a steady increase in educational attainment in recent years, with nearly
200,000 Māori holding secondary or tertiary qualifications in 2006 (196,335 or 60.1 percent
of the Māori population aged 15 years or older).&More than 90,000 Māori hold tertiary
qualifications: 21,153 or 6.5 percent of the Māori population aged 15 years or older hold
tertiary level 1 to 3 qualifications, 47,016 (14.4 percent) hold level 4 to 6 qualifications and
23,070 (7.1 percent) hold qualifications at level 7 or above.
Māori with higher levels of qualifications are more likely to be employed.&This is illustrated
by trends in the employment rate, which reflects both the willingness to participate in the
labour force and the ability to gain employment.&The employment rate was significantly
higher for Māori with tertiary qualifications than for those with fewer or no qualifications: 76.2
percent of working age Māori with tertiary qualifications were employed, compared with 66.8
percent of those with school qualifications, and 51.7 percent of those with no qualification in
2006.
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The proportion of Māori students enrolled in tertiary organisations has increased marginally
over recent years, with 20 percent of tertiary enrolments in 2010 being Māori students.&In
contrast, the proportion of Māori enrolments in industry training has steadily decreased since
2008, with Māori accounting for 17 percent of total industry trainees in 2010.
Māori enrolments were predominantly at Levels 3-4 (38 percent of total Māori EFTS),
although the number of Māori students enrolled at degree level and above increased by 11
percent from approximately 14,500 EFTS in 2009 to 16,100 EFTS in 2010.
Māori educational achievement improved across all sectors, measured by strong course and
qualification rates in 2010.
Māori business
The goals of Māori enterprises are similar to any enterprise: to run organisations that are
well governed, expertly managed and which provide good returns to stakeholders.&In a
series of reports between 2003 and 2005, the Federation of Māori Authorities (FOMA) and
Te Puni Kōkiri examined the business operations, motivations and governance
arrangements for 30 Māori organisations.1 An understanding has emerged from this work,
which is illustrative of the general objectives of Māori businesses.
The majority of Māori businesses understood and embraced the need for commercial
returns.&There is an acceptance of the need to compete in markets and to make
profits.&Standard financial indicators are routinely utilised to assess performance in much
the same way as any other business organisation would.&Organisations were united in
understanding the vital role that a core purpose plays in terms of developing the appropriate
business structure, as well as in assisting resource allocation decisions to enhance
efficiency.&Concepts such as wealth creation, diversification, or protection and
enhancement of assets are commonplace in these organisations.
A major theme emerging from the case studies of FOMA and Te Puni Kōkiri is that industry
leadership is a driving force in many Māori organisations.&It is not acceptable for these
organisations to simply be participating, or making up the numbers in an industry.&Being
widely respected and seen as being at the forefront of industry best practice is the goal.&
As a result, organisations have sought to enhance their ability to respond to changes in
technology, industry practice and market conditions.&Eliminating barriers to successful
uptake and therefore the attainment of an industry-leading position is now key.
Characteristics of Māori business types
More than 80% of the businesses studied are involved in property holdings, agriculture,
horticulture, forestry and aquaculture.&The majority of these enterprises are involved in the
export sector to some degree.
There is a move towards a diversified approach to land portfolio management.&The case
studies and survey both demonstrate a pattern where agriculture and horticulture are being
supplemented with commercial and residential property developments.
Land and marine assets are highly valued resources, which have provided the base for
commercial development over the past twenty years.&Māori organisations are now building
potentially significant assets through other arrangements, such as settlements, contracts and
joint ventures.
1
See Te Puni Kōkiri (2003) Hei Whakatinana I te Turua Po: Business Success and Maori Organisational Governance
Management Study; (2004) He Mahi, He Ritenga Hei Whakatinana i te Turua Po: and (2005)Maori Business
Innovation and Venture Partnerships 2005 -Hei Whakatinana i te Turua Po.
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Types of Māori business entities
The main legal structures used by Māori organisations operating on behalf of multiple
owners are:
a) Partnership
b) Company
c) Charitable Trust
d) Incorporated Society
e) Māori Trust Board
f) Trust
g) Structures under Te Ture Whenua Māori Land Act 1993
 Ahu Whenua Trust
 Whenua Tōpū Trust
 Kaitiaki Trust
 Whānau Trust
 Putea Trust
h) Māori Reservation
i) Statutory Body under the Education Act.
Some structures suit some purposes better than others.&Groups have selected structures to
fit their ownership structures, asset base and goals.&Organisations may also change their
structure at different stages of development.
Governance
Governance in its widest sense refers to how any organisation, including a nation, is run.&It
includes all the processes, systems, and controls that are used to safeguard and grow
assets.
Governance is about:
 Ensuring there is accountability and oversight of a company’s operations
 Having a defined vision for the future of the company
 Making good decisions with a clear view of the big picture
 Identifying opportunities
 Identifying risks and implementing strategies to manage them.
Governance encourages boards to step back from the operational side of the business and
ensure all bases are covered in order to lay the foundations for a smooth future.2
Good governance helps a company:
 Get the most out of skilled directors
 Find the balance between making short-term gains and building long-term wealth.
Good governance is about good performance, reputation, sustainability and
durability.&Although the structure and ownership of an organisation will influence some
elements of governance, the basic governance principles remain the same across all
organisations.
There are however, differences in approaches to the governance and management of Māori
collectives compared with non-Māori organisations.
Unique aspects of Māori governance
Although good governance and management principles and practices are universal, there
are particular characteristics of Māori organisations, which bring extra dimensions to the
2
See Appendix 1.
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practice of governance.&Governance for Māori organisations may require consideration of
the following:
Ngā kaupapa me
ngā uarā
Good governance is underpinned by the values and principles of an
organisation/trust.&Strong Māori governance is then dependent on a commonly
agreed set of values (ngā uarā) and kaupapa (philosophy).&The establishment of an
organisation’s/trust’s kaupapa and ngā uarā are the first essential steps and will
precede employment, management structure and operations.&
Many Māori organisations have multiple purposes.&This means that they are not set
up just to make a profit.&Many have to balance being financially viable with the social
and cultural aspirations of the owners as their core purposes.&Although the
organisations may trade commercially and measure themselves against economic
indicators, wealth creation is not seen as an end in itself.
Purpose of the
organisation
In setting up and selecting the type of legal structure for an organisation, it is
important to clearly know the intended purpose of that structure.&For example, if
Māori land is the core asset, because this land will never be sold, for either legal or
tikanga reasons, the organisation will not be able to make trading decisions following
usual commercial models.&This can make running a Māori organisation particularly
challenging.
The importance
of tikanga and
values
Tikanga principles are often put into practice in the board of a Māori organisation
alongside general governance principles.&Many Māori organisations are explicitly
driven by tikanga, kawa and values (for example in employment, tangihanga and
cultural leave policies), which take into account the aspirations of whānau, hapū and
iwi.&Cultural considerations will sometimes take precedence over purely economic
factors (for example building in close proximity to urupā or recovering debts from
relatives).
Māori organisations may also have a Māori dimension in procedures such as the use
of te reo Māori, mihi, karakia, koha, hospitality for manuhiri, manaakitanga,
whanaungatanga, consensus decision-making and regular consultation hui.&These
elements should support the general principles of good governance.&It can be
important to have people with expertise in tikanga and kawa on the board.
Long-term view
Many Māori organisations have an extremely long-term view of their future.&This has
implications for many aspects of governance such as selecting board members with a
view to handing the business on, and in strategic planning where a 25 year view, or
even more, may be taken.
Some stakeholders, including people providing finance, may take a short-term view,
for example focusing on immediate and short-term returns or only thinking in terms of
a five year planning cycle.&Good communication with stakeholders and potential
financiers about the strategic plan is therefore recommended to ensure that any longterm view is well understood.
Board
membership
This can be a particularly challenging area for Māori organisations.&Rather than a
strictly business skill base, board appointments in Māori organisations may be
influenced by: the requirements of the specific structure of the organisation (say a
trust under the Te Ture Whenua Act); by an election process (for example, a Māori
Trust Board); by whakapapa and tikanga requirements (a rangatira or respected
elder); whanaungatanga (a relative); or because of expertise in other fields
(i.e.&business/financial skills/qualifications).
If a board for example cannot find all the skills in one person, the board may balance
people who are appointed for business skills and others for their tikanga skills.&There
is a perception that the pool of "experts" is small, especially for those who have
expertise in business and finance.&Transparent appointment processes are
recommended and help to avoid allegations of appointing relatives to key positions.&
Quality control issues are also important and can be helped by advertising vacancies,
candidate vetting, education / training of existing board members, regular board
member rotation, annual assessment/audit of performance and procedures for
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removal of board members in the event of non-performance.
Board
management
The dynamics around the board table of a Māori organisation can be influenced by
factors such as: the multi-purpose nature of the operation; the importance of tikanga
and values; a long-term view; appointment of board members; owner involvement;
restrictions on commercial use of assets; and use of Māori terms.&All this can make
the board dynamics of a Māori organisation more challenging.
The need for managing the board dynamics through good governance, leadership
and transparency is vital.&Good communication is therefore crucial.&This includes
directors and trustees asking questions to be sure they have a good base of
understanding for making decisions.
Owner
involvement in
decision-making
Boards of Māori organisations may be required to undertake a higher level of
consultation, even in commercial decision-making, than in non-Māori business.&For
instance, a board may be expected (or required by law) to go back to owners on an
investment decision for approval.
Reporting can be cumbersome and conflict can arise at board level if appropriate
consultative processes are not followed.&The additional delay and lost opportunities
need to be balanced with any requirements to consult.&Factors to be taken into
account include consultative burnout and commercial opportunities lost as a result of
delays.&A good board will find the appropriate balance.
Commercial use
of assets
Many Māori organisations have restrictions on the ability to use their core
assets.&Those restrictions can be imposed by law (legislation or core legal
documents such as a trust deed) or by the owners (in accordance with tikanga such
as an aversion to sell ancestral land or use it as security).
Such restrictions can lead to problems in dealing with financial organisations
(particularly trading banks) that usually require security before providing finance.
Māori organisations may also have problems finding financial organisations prepared
to accept Māori freehold land as security for lending, especially where Māori freehold
land is the core asset.
In such situations Māori organisations may have major difficulties achieving their
purposes, particularly if those purposes include developing the land and/or creating
financial returns for the owners.
Challenges
Good governance creates a strong future for an organisation by continuously steering
towards a vision and making sure that day-to-day management is always lined up with the
organisation's goals.&At its core, governance is about leadership.
To that end, an effective board will improve the organisation's results, both financial and
social, and make sure the owners' assets and funds are used appropriately.&Poor
governance can put organisations at risk of commercial failure, financial and legal problems
for directors / trustees or allow an organisation to lose sight of its purpose and its
responsibilities to its owners and people who benefit from its success.
Not every Māori enterprise has problems with respect to governance.&Nevertheless, there is
sufficient perception amongst Māori and non-Māori alike that governance of Māori
enterprises requires strengthening.&
This is sometimes described by reference to slow decision making requiring extensive
consultation, which even then remains subject to veto.&The intensity of politics puts
members of governing groups under intense personal pressure if they go one-way or
another on key decisions.&
There are already a number of programmes being delivered by a variety of organisations,
which develop business capabilities, but there is also a risk of duplication, fragmentation and
an inability to build organisation critical mass to effectively engage with Māori collectives and
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enterprises.&There is currently limited data on the uptake by Māori enterprises of these
programmes.&Anecdotally however, this is thought to be low.
The prospect of the Māori Land Court review is another factor contributing to a perception of
brittleness about governance in Māori enterprises.&Attendance at courses, such as those
run by the Institute of Directors, is pointed to, as a partial recognition of need for
improvement, but are criticised as elementary learning and not a well-rounded education in
the governance role.
The position is further complicated by the unfamiliarity of the structures predominately
employed for collective land holding.&Māori incorporations and ahu whenua trusts are
unfamiliar structures for capital markets providers in comparison with standard companies
and Limited Partnerships.
Future landscape
In the post-treaty settlement environment, important changes in the following areas will
impact on the Māori enterprise landscape:
 The prominence of financially endowed iwi
- The role of iwi relation to local and regional resource management is already being
supplemented by an expectation of iwi involvement in infrastructure
development.&This has the potential to expand their role in the commercial sphere in
the provision of such assets, but currently they lack the resources to fund meaningful
participation in large-scale capital-intensive investment.
- Iwi are becoming an important conduit between government (at both central and
territorial levels) and the private sector.&Modern re-interpretation of the meaning of
Treaty partner relationship is portraying iwi as valuable partners to private firms
seeking to supply services to government.
- Some Treaty settlements have given deferred purchase rights and first rights of refusal
in relation to Crown-owned assets.&Settlements have also reserved the position of
claimants with respect to important resources such as water, geothermal and certain
minerals.&Claimants will need access to capital to exercise such rights and / or exploit
such resources as they become available.

Land-owning trusts and Māori incorporations
- In sheep and beef farming, structural changes in the industry are occurring in response
to structural cost pressures, exacerbated by drought conditions and attempts to control
the supply chain, reduce costs and improve quality.
- In forestry, face the requirements of financing the replanting of previously harvested
forest lands.
- Have opportunities to develop more intensive land-based activities, which would
increase the overall productivity of their land.&This includes changing land use,
alternative production, energy supply, adventure tourism, and the like.
- Owners of pre-1990 forest land face a special challenge because of the liability
imposed on them by the Emissions Trading Scheme.
The face of Māori business is changing.&Māori businesses are not so tied to land as a
primary economic asset as they once may have been.&They engage in an increasingly wide
range of business activities, and the trend is ever widening.&The range of economic
activities includes traditional agribusiness, horticulture and forestry, commercial fishing,
aquaculture, tourism, property development and electricity generation.&Iwi hold land on
which is situated government buildings such as Police stations, Courts, schools and
universities.&Iwi may yet become involved in provision of core national infrastructure in
Public Private Partnerships (PPP).
Iwi have become increasingly prominent in the provision of social services to their
communities and an important source of capital for the development of such enterprises and
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local infrastructure.&The appearance and growth of Māori tertiary education institutions and
pan-tribal organisations in fishing and forestry should not be overlooked.
Māori organisations are often set up to provide a resource for future generations, so their
long-term vision and strategies to ensure its continuing success, including capability are
critical.&
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Supplement One
Boards
Boards make decisions on behalf of owners / shareholders, beneficiaries and other
stakeholders of an organisation.&A board's essential role is to set and lead the organisation
safely and successfully into the future.
The key tasks of a board are:
a) Managing risk
 Directors / trustees are expected to identify and manage obstacles that may prevent
the organisation from reaching its goals.&The whole board must be involved in risk
management, particularly around financial matters and legal compliance.

In managing risk, directors/trustees have a responsibility to owners to foresee what
could affect the organisation and to make sure plans are in place that will minimise
the impact of events or changes that will have a negative effect.
b) Setting the purpose and vision
 Setting the long term direction for the organisation is the board's most important
role.&Having a strong sense of the organisation's destination focuses board and
management activities.&The “purpose” is at the heart of that direction.

Many Māori organisations have multiple purposes.&They may have to balance
making a profit with meeting the social and cultural aspirations of their
owners.&Although the organisations trade commercially and measure themselves
against economic indicators, wealth creation is not always seen as an end in
itself.&This can make running a Māori organisation particularly challenging.
c) Setting strategies for achieving the vision
 Once the board has set the purpose and vision for the future of the organisation,
directors/trustees and management will work through a process to plan the
strategies that will take the organisation on its journey.

Strategic plans are long-range — at least five years.&It is not uncommon for Māori
organisations to develop strategic plans for 25 years — a generation.
d) Recruiting the CEO
 Once the board has set the purpose and vision for the future of the organisation,
directors/trustees and management will work through a process to plan the
strategies that will take the organisation on its journey.

The board is responsible for appointing the chief executive and monitoring his/her
performance against agreed targets and indicators.&The qualities and skills the
board will look for in a CEO will vary in each situation, depending on the strategic
direction.
e) Monitoring performance
 Directors/trustees are responsible for making sure the organisation's strategies are
successfully implemented.&Areas of performance where monitoring is most critical
are:
- Budget and financial performance
- Legal compliance
- Chief Executive performance
- Board performance
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f)
Demonstrating accountability
 Directors and trustees are responsible for the stewardship of assets and the owners
of those assets hold the board accountable.
- Budget and financial performance
- Legal compliance
- Chief Executive performance
- Board performance
How boards work
Effective boards need:
 A good skill mix within board directors / trustees
 An effective chair
 Committees for specialist tasks
 Well managed meetings
 Board dynamics that allow all perspectives to be expressed
 Outside specialist help on some issues
 Good self-evaluation
Studies on successful organisations also show that effective boards demonstrate a strong
understanding of the line between management and board responsibility.
Being a board member
A board's success rests on the skills and commitment of the directors or trustees, who make
decisions on behalf of the owners and continuously make sure the organisation, is moving in
the right direction.
Crucial to the role is the ability to work for the good of the organisation as a whole.&Even if a
director / trustee has been elected or appointed to represent a particular group, as a board
member his / her duty is to consider the overall success of the organisation.
Directors / trustees are often working not just for the current owners of the organisation, but
for future generations of owners.
Boards and management
One of the key findings from studies of successful Māori organisations is the need to keep a
clear distinction between board and management responsibilities.
The board sets the overall direction for the company and management carries out the dayto-day running of business.&Management then reports to the board with all the information
the board needs to be sure that operations are running well and in line with the
organisation's purpose and direction.&The board's job is not to manage the daily operations
directly, but to make sure that it is well-managed.
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