Business Ethics

13 First Nations Governance

Learning Objectives

  • Understand the First Nations governance structure.
  • Critically analyze problems and generate ethical business solutions.

Before European contact in North America, the land was inhabited by Indigenous people; each community shared their own beliefs, structure, and practices. The Indigenous people of North America had their own legal system and governance unique to their community. Considering Aboriginal rights and land claims is increasingly essential when understanding First Nations claims and aspects of self-governance in the region. The traditional land claims are linked to community historical land/water use dating back, in many cases, for thousands of years. As Malone and Chisholm said, “Oral histories shared between generations also contain traditional knowledge about ancestral territories. These stories provide information about an Indigenous nation’s territory thorough knowledge of use patterns and observations about ecological systems and past events that have occurred through thousands of years of occupation.” Three groups hold power in Indigenous communities:

  1. Elected Band Council – Elected chiefs and council generally hold authority over reserve lands and infrastructure. To become an elected Band member, the community votes and elects the chief. Even though their community members elect them, they do not work for the community; they work for the federal government. First Nations governance centres on the relative authority and power of elected chiefs and councils, which are empowered by a system that was created under the Indian Act, this system was and still is imposed as an assimilation tactic that was implemented to undermine traditional leadership, which includes hereditary chiefs, elders and matriarchs. Another consideration is to remember that when you conduct your research before entering into any business discussions, you need to understand the election cycle. “If you are beginning your engagement with a community that is nearing the end of its election cycle, be careful who you align yourself with.” (B. Joseph, 2019)
  2. Hereditary chiefs, traditional leaders, and clan leaders are the traditional knowledge keepers and are recognized as having greater authority and rights relative to things like traditional territory or cultural knowledge and tradition. Hereditary chiefs differ from the elected chiefs because they are born into their role. There are many communities where a child is selected at birth and trained for leadership responsibilities, similar to the role of kings and queens throughout history.
  3. “Many First Nations were matrilineal, meaning that descent — wealth, power, and inheritance — were passed down through the mother. Historians and scholars have emphasized the various capacities in which women were able to hold positions of power and leadership in their community.” (Hanson, 2009b)

Adding to this possible confusion is that communities often have very different weights assigned to the sources of governance. For Industry to achieve an agreement with Indigenous communities, typically, hereditary chiefs, matriarchs, and elected chiefs and councils will need to be consulted during negotiations. Every Indigenous community has a highly distinctive social organization shaped by their culture and traditions, their hereditary governance, and the governance structure imposed by Crown–Indigenous Relations and Northern Affairs Canada (CIRNAC). These factors all influence how a community does business, their recognition of land and title, their wealth, and their trading and political objectives.

Whatever style of governance — self-governance, Indian Act, or more traditional governance — businesses still need to conduct business. The conversations and negotiations still need to happen, information needs to be shared and consent has to be given for a project to proceed. Respecting and acknowledging that every Indigenous community has their form of governance will be vital to creating a good business relationship. In one community you may be conducting business with chief and council elected into their position. In other communities, a combination of hereditary and elected chiefs may make the decisions.

One of the challenges here is when the elected and hereditary chiefs do not agree on a project. You may think, “Not my problem; all we need to do is get someone with authority to sign on to the project.” The best practice here is to hold a community information session for the whole community and invite everyone involved in the project; if there is no possible way for both hereditary chiefs and elected chiefs to conduct business in the same room, hold two separate sessions. Learning about the community’s decision-making protocols and procedures beforehand will help you greatly in attaining an agreement that benefits both parties.


Day one: Stacey, the elected band chief, signs the IBA contract and receives a $10,000 cheque addressed to her. Daniel, the project manager, is happy and phones the main corporate office to let them know that the project is a go. He thinks he may even get a promotion for being so efficient and amazing. He tells Stacey that he will come back in two weeks to take her out to the site to see how the project is going. Daniel tells Stacey that there will not be much going on, as they are just getting started, but it would be good to go out and take a look.

In the meantime: Stacey is excited about this project; even though she decided on her own to approve the project, she is confident the community will approve and will understand that she knows what is best for them. She wants to cover her bases anyway and ensures that she informs the community. As she was leaving work for the day, she casually mentioned to the band workers, including the janitors who were working that day, the great news about the project. She thinks that word of mouth will be enough to inform the community of this major project. She goes home and starts planning her next vacation.

Daniel does nothing.

Two weeks later: Daniel returns; he has not communicated at all with Stacey or anyone from the community since the first meeting. Daniel rushes into the band office and tells Stacey that they will go look to see how the project is progressing today. When they arrive at the site, they are not prepared for what they find: a group of community members lying on the grass, not allowing the construction to start. Here is a clip depicting this scene:

Transcript – Police standoff in the sacred headwaters [PDF]


  1. From an ethical standpoint, what has Daniel missed in the consultation process?
  2. Do you believe that Stacey was acting ethically?
  3. From what you have learned in this chapter, who else needed to be consulted?
  4. What do Daniel and Stacey need to do to fix this situation?
  5.  Do you think this deal can be saved? If so, how?
  6. What UNDRIP article has this breached?
  7. What other ACTIONS could Daniel take to show his company is sincere and is dealing ethically with the community?

Media Attributions


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Indigenous Perspectives on Business Ethics and Business Law in British Columbia Copyright © 2022 by Annette Sorensen and Scott van Dyk is licensed under a Creative Commons Attribution 4.0 International License, except where otherwise noted.

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