Te Uranga B2 Incorporation was established in 1958. It was fi rst incorporated in 1910. Located on the Ngakonui Ongarue Road, 13kms north east of Taumarunui, Hikurangi Station is approximately 2328 hectares (5754 acres). The Incorporation has 629 shareholders.
The core business of the Incorporation is in dry stock, dairy and sheep farming with some interests in forestry. Hikurangi Station is separated into three farming units managed independently, therefore spreading risk and capturing market opportunity. The three units are:
In addition Hikurangi Station has three areas for environmental and forestry activities. They are:
Te Uranga B2 has a Committee of Management which comprises five committee members. All members are shareholders who are elected for a three year term at the AGM. The chair and the secretary are chosen annually from this number by the Committee members.
The Incorporation has no subsidiaries, joint venture partnerships or associate companies. The dairy unit is run by sharemilkers who are directly responsible for five staff.
Both the sheep and beef units have one manager and one part-time casual staff. Casual staffing is usually required for seasonal work. The Committee of Management engages casual local labour to manage the woodlots for seasonal work such as pruning.
The Incorporation has a ten year strategic plan, which is reviewed annually. One of the major priorities for the next ten years is to diversify assets and increase revenue through off-farm investments.
The Incorporation meets in May to review its plan, coinciding with the Incorporation's financial year (July to June). This means the Incorporation has most of the financial data enabling it to be better prepared for its strategic meeting.
Annual budgets for the operations are prepared initially by the farm managers and the farm consultant who make recommendations in conjunction with the Incorporation's accountant. The draft budget then goes to the Committee for approval. The Committee's decision regarding the budget is final and the manager is required to work within that budget. The operational budgets are prepared before the strategic meeting.
Budget management is the responsibility of each farm manager who has the flexibility to use funds according to immediate priorities in order to meet agreed farming goals and objectives. Budget blowouts are brought to the Committee's attention as soon as possible and strategies are agreed upon to mitigate budget negative effects.
The accountant participates in the monthly Committee meetings in an advisory capacity. The farm consultant attends Committee meetings bi-monthly.
At present the Incorporation does not have a formalised process for making investment decisions as it only recently established an investment portfolio and assigned this to a Committee member. The portfolio holder has the responsibility to consider investment opportunities to table for the Committee to consider.
The Committee is in the process of establishing terms of reference by which to measure investment opportunities. A former policy (yet to be reviewed and formalised) that the Committee has always had, is to buy back farms from their original block.
The Incorporation does not have a specific due diligence policy. However, it has an 'unspoken' policy, or a standard of best practice, when making any business decisions. It always seeks professional advice whether it is legal, financial or in other specific fields of expertise.
The Incorporation does not have any formal risk management policies. The farm managers are responsible for on-farm safety and compliance with the health and safety legislation. It also has a good relationship with the Regional and District Councils making compliance issues regarding land management easier to manage.
The Committee discusses the monthly budgets at regular monthly meetings (also attended by the accountant). Although there is no formal risk management policy the Committee relies on the experience, intuition, commonsense and good practice of the members to mitigate any risks.
The Incorporation does not have a conflict of interest register. However, it has a policy of declaring all matters that may give rise to a conflict of interest. Any Committee members that have a conflict will abstain from the decision making process, although they may participate in discussion before leaving, if they have information to contribute.
As stated above the Incorporation was created in 1910 and leased out to four lessees. These leases were wound up in 1953 and the present Incorporation was formally incorporated in 1958. Over time the Committee dynamics have changed.
Shareholders have taken on a more participatory role in recent years. The way the Committee engages with shareholders has also changed. Communication is now a major focus with the Incorporation providing a quarterly newsletter and a website. The Committee also uses powerpoint presentations at the AGM.
Some of the major changes made in terms of governance policies have been:
Te Uranga B2 Incorporation has a policy of hiring the best people for the job. The policy is based around employing people who will add value to the business.
The Incorporation has now formalised terms of reference for its consultants who also have reporting timeframes to comply with.
The Incorporation encourages the farm managers to adopt methods that may contribute to best practice. Recently one of the farm managers trialled computer software to analyse farming results and to make business decisions based on those. This approach was compared with another farm manager who adopted a more intuitive farming management style. Although both approaches were vastly different the farms had similar results. The Incorporation also encourages farm managers to be part of district and regional farming support groups.
The Incorporation adopts an 'open door' policy for shareholders. Shareholders can see the share register or financial accounts at any time. The Incorporation sends a quarterly newsletter to all shareholders and last year set up a website.
The website has been an effective communication tool. The Incorporation now has had contact from shareholders who live overseas and shareholders that have never had contact with the Incorporation before.
The Incorporation also has an AGM where all shareholders are informed of the Incorporation's progress over the past year.
The Incorporation has not adopted any formal reporting process for 'social and cultural investment'. However, it strives to adopt a balance by providing returns to shareholders while maintaining resources for business development.
The Incorporation is well known for its social contribution to the community. It has contributed to various community initiatives, in particular it has resurrected a district garden tour, and sponsored many events such as the national women's ATV (all terrain vehicles) championships, a field day organised by the HORIZONS Manawatu and Wanganui Regional Council, the Central King Country Axemen's Association, and the Taumarunui Speed Shears. The Committee also sponsors a cup at the local primary school, awarded annually for excellence in culture and arts. Further to this, the Committee supports a native planting programme run in conjunction with the local primary school and HORIZONS Manawatu and Wanganui Regional and Ruapehu District Councils.
The Incorporation also offers secondary and tertiary education scholarships to shareholders or descendents of shareholders, as well as providing koha for tangihanga of shareholders.
The Incorporation has an annual farm business analysis completed by AgFirst Rotorua. This benchmarking exercise analyses the performance of the Incorporation against approximately 30 other Māori authorities throughout the country.
The secretary of Te Uranga B2 Incorporation holds the Environment portfolio as she has great understanding of environmental planning. This is particularly important as she is often lobbied by the outside community and in many ways is the first point of contact.
The Committee also encourages farm managers to create good relationships with stakeholders and the business community. Creating and maintaining relationships with the community and stakeholders is part of the philosophy of the Incorporation.
The Incorporation follows the standard procedure under Te Ture Whenua for elections. The elections are held every three years by rotation, and committee members may be re-elected or new ones appointed. Shareholders choose either by show of hands or by poll.
The Incorporation recognises the difference between governance and management. The Committee of Management manages at a strategic level. It makes decisions about what it wants to achieve and these decisions are then relayed to the managers.
The managers are also clear about their role. They meet monthly with the Committee and manage the farm according to the decisions made at the governance level and within the budget approved by the Committee. However, the managers have the authority to shift funds around as long as their expenditure is within the bounds of the budget, and the accountant and farm consultant are informed.
The Incorporation does not have a trust manager or chief executive. It believes that this is unnecessary, preferring to outsource any services required. The Incorporation does not have an operations manual. Its administration services are conducted in part by the secretary and in part by the professional advisors (eg accountants or lawyers).
The Incorporation does not have any subcommittees. The Committee fully participates in all business decisions and activities; portfolios are assigned for specific responsibilities and any expert advice is outsourced through professional advisors.
When conflict arises between management and governance the Committee of Management nominates the most appropriate person on the Committee to speak with the manager and Committee member concerned. Issues arising between Committee members are bought to the table and discussed 'kanohi ki te kanohi'.
The Committee follows procedures of due process if issues arise with management. The issue is discussed with the Committee collectively and someone is nominated to deal with the manager exclusively. The Incorporation finds this to be an effective method, particularly when delegating the matter to the person who would be most effective in the given situation.
All managers have employment contracts. Management performance and operations polices are reviewed annually. However, operations policies are changed if unviable. Management performance is reviewed against the budget, stock figures, sale prices and stock condition.
The Committee of Management consists of five people. This is regarded as an optimum number. Shareholders nominate individuals for governance roles at the AGM. As stated above each Committee member is elected for a three year term. The Incorporation has no criteria for people to be nominated or appointed as a Committee member. The nomination is also not contingent upon producing profiles or curriculum vitaes. The Committee of Management and shareholders have yet to request that all candidates provide such information. However, all nominated candidates make a presentation to the shareholders and are then able to answer any questions from the floor.
The Incorporation does not have a training plan for its Committee members although all have attended Māori trustees training courses. The Committee is informed of any legislative and industry changes by its professional advisors.
Last modified: 15/06/2011
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