Whangara B5 Incorporation was established in the 1930s as a result of the land consolidation schemes that were initiated by Sir Apirana Ngata. The land consolidation scheme was an initiative where scattered pieces of land were consolidated into one single unit for the purpose of forming an economic farm.
Whangara B5 is located 30 km north of Gisborne and has 686 shareholders. The core business of the Incorporation is in sheep and beef farming. Other business interests are sand mining, forestry, a stud ranch (goats) and hay sales. The total landholding is 2600 ha most of which is farmed and some of which is leased. The Incorporation's asset base is approximately $11 million.
The Incorporation has seven committee members and a Secretary; this body is referred to as the Committee of Management. The Incorporation has two sub-committees; education and housing. A farm manager is employed to manage their farms and there are five employees under the farm manager. Overall the Incorporation has six full time workers, four casuals and several seasonal workers, such as shearers who are employed twice a year.
The Incorporation has no joint venture partnerships, subsidiary companies or associate companies. However, it is currently investigating a farming partnership with Pakarae Māori Farming Incorporations.
The Incorporation commenced strategic planning nine years ago, and has a current three year strategic plan that is reviewed annually. The strategic plan takes a long term view of the farming businesses and other business projects including a sand mining operation, tourism, horticulture and property investments and buying into the local infrastructure of the Gisborne District Council.
The Incorporation's financial year runs from April to March. Annual planning for the farms is done by the farm manager who consults with the secretary. The plan is then taken to the Committee of Management for approval.
One of the objectives in the Incorporation's strategic plan is to increase the asset base. The Incorporation has a benchmark minimum return on investment of 10%. A full due diligence is undertaken for all large investments and all investment decisions must be approved by the whole Committee of Management. A full due diligence process is not undertaken unless the investment fits within the Incorporation's strategic plan.
The Incorporation has extensive risk management policies for different aspects of its farming operations. Separating the operations of the two farms is one way it manages risk. For example, this allows the Incorporation to operate at one farm even if the other farm were quarantined.
The Incorporation does not have a conflict of interest register. Due to the close knit nature of members it is considered their interests are well known. Conflicts arising in relation to whānau applying for grants are dealt with by members abstaining from voting.
Key changes in governance practices for the Incorporation have been:
The Incorporation benchmarks itself against farming industry practice. Its farming operations comply with the health and safety requirements set out under the health and safety legislation. The farm uses an OSH consultant to consult on these practices.
To maintain best practice, in 2003 the Incorporation entered the Māori Farmer of the Year Award. Committee of Management members also attend Federated Farmers meetings regularly.
The Incorporation reports to shareholders at the AGM by reporting against the goals in the strategy and annual business plans. The Incorporation also organises field days at the farm for the shareholders to attend. Shareholders also have access to the share register.
The Incorporation consults with shareholders on all important issues. For example, the Incorporation is considering undertaking a feasibility study on a partnership with another organisation but will seek the approval from the shareholders before making decisions.
The Incorporation undertakes the standard reporting mechanisms to measure financial performance, such as equity/debt ratios or return on investment. The Incorporation takes the initiative and reports against social and cultural performance, mainly in the form of grants such as:
The Incorporation also reports on wider social, cultural and environmental activities. For example, the Incorporation invested $90,000 in erecting a wall around the urupa to preserve this area.
Environmental initiatives that the Incorporation has undertaken include planting trees on the property to prevent slippages, using goats for weed control and minimising the use of sprays. For obvious environmental reasons the Incorporation has also fenced off an area of native bush on its land.
The Incorporation does not have a formal review process. It is also something that is not likely to happen in the foreseeable future. A particular factor is that some committee members perceive themselves as being there on behalf of their whānau and not as an individual subject to broader scrutiny.
Communication with shareholders primarily occurs at the AGM although the farm manager does communicate with stakeholders and shareholders regarding farm issues, and the chairperson and secretary take responsibility for communication of all other issues.
The Incorporation uses a three year staggered rotational system for electing committee members. It has not amended the constitution to change the nomination close off date which remains two days prior to the elections.
The Incorporation has unsuccessfully sought to amend its constitution to give it the ability to co-opt on a younger person as part of a strategy to build in succession and to add new skills and dynamics to the committee. The Incorporation also finds that it receives more proxy votes than votes from those present on the day of elections. This is something that it may address in the future. The Incorporation has also sought agreement for candidates to submit profiles for the elections.
The Incorporation recognises the difference between governance and management. It does not have a CEO, although its business activities, which are mainly in farming, are managed by a farm manager. The decisions made at the sub-committee level are recommended and go back to the Committee of Management for final approval.
The farm manager has authority to spend money within budget limitations in accordance with the agreed annual business plan. The farm manager can also shift funds within the budget but all major decisions are brought to the Committee of Management for final approval.
The farm manager attends Committee of Management meetings every two months. Outside the bi-monthly meetings, the farm manager will discuss any management issues with the chairperson and/or secretary. The Incorporation's employment policy is to employ the 'best person for the job'. Management performance reviews are annual and reviewed against the financial results of the farm.
The Incorporation's farm operational policies are continually reviewed and changed to fit the conditions. These policies are based on practice as opposed to being formally documented.
The chairperson and secretary regard the five Committee of Management members as an optimum number for the governance role.
The Incorporation encourages committee members to attend governance training workshops and conferences.
Last modified: 15/06/2011
