Corporate governance challenges: Alaska Native Corporations and their boards.

• Author: Lind, Sharon Guenther
• Position: SPECIAL SECTION: Alaska Native Business

In 1971, ANCSA (Alaska Native Claims Settlement Act) was ratified to resolve long-standing indigenous land claims and to nurture economic development for Alaska Natives with the creation of the Alaska Native Corporation. The Act created more than two hundred village corporations and twelve regional corporations within Alaska.

In 2013, the twelve ANCSA regional corporations, with more than one hundred thousand shareholders, generated close to $9 billion revenues, and they are among the top employers in Alaska. Regional and village corporations have chosen a variety of different organizational and corporate governance structures in terms of board operations, executive and board compensation, board elections, and shareholder involvement.

Community Values

A portion of global society is beginning to realize that economic success should not always be measured by Western standards: other standards are being explored and embraced, including community values and beliefs. The Western model is referred to as the shareholder approach to business governance.

Native people embrace a different set of values: a commitment to tradition, heritage, culture, and respect for the environment; communal and individual ownership; and sharing and group recognition rather than individual rewards. The cultural fit and values play a major role in the success of the economic development in Alaska Native communities.

Native people have organized collaborative societies and worked together in order to share the wealth of their community. In many ways, Native people are the first "cooperators." Individualism and freedom of action are important values but are "tempered by community pressure enforcing solidarity and conformity to norms and goals of the cultural group."

Establishment of these organizations required an understanding of the corporate world, ANCSA, and both state and federal law--a huge learning curve encountered by the early boards of these Alaska Native Corporations. Building a corporation from the ground up can be daunting; add to that the complex and unique components of ANCSA and it is easy to see the many challenges of these boards.

Diversity, Independency, and Ownership Structure

Even today, boards are facing challenges with respect to board diversity, independency, and ownership structure. What happens when the pool for the selection of a board consists of individuals who are all shareholders, typically from the same ethnicity, who perhaps speak the same...