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It's not uncommon for Indigenous community leaders to hold multiple roles of influence. Neither is it rare for those roles to intersect in ways that create conflicts of interest. Learning to spot these conflicts in advance, and deal with them responsibly, is therefore critical to protecting the strength and integrity of all related parties.

“Often times, you'll see a Chief or counsellor that also sits as a director on their economic development corporation's Board of Directors or the board of a business that the Nation owns. That means they have a fiduciary duty to act both in the best interest of the Nation and the corporation they serve, be it a profit or non-profit organization," says Kimberly Thomas, a corporate lawyer from the Seneca Nation, Bear Clan, based at Six Nations of the Grand River Territory. “In those cases, the question is: How do you serve both masters? How do you mitigate risk when you have those competing duties?”

COI2Defining Conflicts of Interest

Conflicts of interest take seed when an individual in a position of influence has competing – and often incompatible – priorities. They occur when that individual allows their position in one role to inform their actions in the other, swaying decisions and discussions in a way that would not happen without those "insider" perspectives.

For example, says Thomas, “If a business's funding decision hits the Council table and you're privy to knowledge as a board member with that business which you wouldn't otherwise have, you'd have to declare a conflict. And then, vice-versa, if you're on the Board of Directors and you're privy to information from your role at the Council table, you'd also have to declare a conflict of interest.”

Declaring up front

It's important to declare a conflict of interest as soon as it surfaces and then ensure that declaration has been officially documented on tape or in the minutes. It is equally important that the individual removes themselves from related discussions and votes, as doing either could be perceived as attempts to leverage their position with the opposing party to come out ahead.

“Some of my clients assume they can still stay in the room as long as they don't vote,” says Thomas. “My position on that is that you can still be influencing the discussion that might not otherwise happen if you're in the room. So if you leave the room, it allows for a very free and fluid discussion without anyone watching their words or what they're saying because you're still sitting at the table.”

Knowing the risks

Whether done knowingly or not, participating in conflicts of interest can have significant consequences. In the case of overseeing monetary issues, one can be liable for any loss of financial profits for the corporation. In the case of influencing council decisions in favour of business priorities, one can also be subject to civil liabilities.

Then, says Thomas, there is the reputational damage: "Your reputation is everything in an Indigenous community, and once you've had that damage to your reputation or lost it entirely, it can be tough – if not impossible – to get that back."

Mitigating the Risk

Risks aside, it's acceptable for Indigenous leaders to have dual roles; and indeed, it can be quite common, especially in smaller communities where an individual's talents and experience make them a natural choice for multiple roles.

Herein, says Thomas, those that find themselves in these positions would do well to recognize the dangers, declare conflicts when they arise and continually respect the boundaries between each of their roles: “It's not necessarily wrong for someone to hold both of those roles and, arguably, those interrelationships can help bring in important perspectives, allow the sharing of resources, expertise, and best practices and unite the Nation towards common goals. You just have to be aware of when lines are being crossed and how to mitigate that risk.”

Kimberly Thomas is the owner of Kimberly Thomas Professional Corporation and Affiliated Independent Counsel with Aird & Berlis LLP, a full-service business law firm serving clients across Canada. For more insight, contact Kimberly Thomas at kthomas@kimberlythomas.com or 519 445 2788.