Trusts But Verify: An Interview with NATOA President Mark Sevestre

By Heather Exner-Pirot, SFNEDN Board Member 

Mark Sevestre is the President of the National Aboriginal Trust Officers Association (NATOA) and General Manager of the Mississaugas of New Credit First Nation Trust.

What are trusts and why do so many Indigenous communities have them?

Trusts are an effective financial vehicle that provides transparency and formality for specific funds that are provided to Indigenous communities, whether they are derived from Land Claim settlements, impact benefit agreements, own source business revenues, or any other source.  Trusts were the preferred vehicle for governmental settlement arrangements in the early years and that may be why so many Nations have a Trust fund.

What is NATOA’s role? How do they support trustees and communities?

NATOA was the creation of three First Nation Community Trust managers that met in 2006 and expressed the need for a national organization to support Indigenous communities in this area. They felt that education, knowledge and capacity were lacking in the marketplace. NATOA’s membership not only includes those Indigenous communities who operate or are establishing a Trust, but also includes investment management firms, advisory firms, lawyers, accountants and others within the service provider community that deal with our communities.

NATOA provides training and networking opportunities through a national conference, regional and local community workshops, and an online Trustee Training Course through Lethbridge College.

It’s common to hear about ‘bad’ trusts – ones with poor returns, onerous restrictions or no ability to be changed. What are some common mistakes that you see and try to address?

This is one of the main reasons NATOA was formed, to ensure these ‘bad’ trusts were no longer implemented. Not all lawyers, advisors or Indigenous leaders understand all aspects of these trusts or investing. It is critical for Indigenous communities to seek out all relevant information about trusts, from the various structures to the purposes that trusts can fulfill within their communities. Understanding the marketplace and players is necessary before proceeding with any establishment of a trust. Sometimes when you hire a particular advisor, they will only provide the community with their preferred trust solution without any evaluation of the community’s needs or strengths.  Their trust solution is merely a cookie-cutter template they use for all their clients, whether they are appropriate or not.

What does a good trust look like? What are the best practices?

There is not one perfect trust model but there can be a perfect trust model tailored to each community’s unique traditional and cultural values and needs. A good trust is one that meets the needs of a specific community, whether current, near future or distant generations. When the leadership of a community seeks out relevant information on trusts, investing and addressing community needs, they can then seek out the appropriate industry professional firms that can help them meet those needs with the appropriate financial vehicles.

A good trust is one that is flexible over time as the needs or opportunities of any community will change with social, fiscal or economic circumstances. However, a good trust must be inflexible enough to withstand the whims or desires of any one Board of Trustees, or Chief and Council to protect against abuses or mismanagement.

Transparency and accountability to the beneficiaries is the ultimate best practice to ensure the effective even-handed management of the vital community asset is key. Attending the annual NATOA National Conference (May 4-5, 2020 Banff Alberta) or registering for NATOA’s online Trustees Training course would ensure the most recent and important knowledge is acquired to provide your community the best possible outcomes for their Trust.

What are the biggest trends in Indigenous trusts that you are seeing?

The linkage of an Indigenous community’s traditional and cultural values to their approved Investment Policy Statement is becoming a very interesting and needed movement. When an Indigenous community hires a qualified investment firm, they approve an Investment Policy Statement that provides the investment manager the rules and guidelines about how their funds will be invested on behalf of the Indigenous client group. However, the IPS usually deals with risk tolerance, time horizon and asset allocation. No consideration to the values of the client were normally included. The ‘values’ that were in play were essentially those of the group of generally ‘non-Indigenous’ investment professionals.This is starting to change as many of these investment managers’ other clients insist on a value- based investment approach from a religious or ethnic perspective.

NATOA and Share Canada partnered to create the Reconciliation and Responsible Investment Initiative (RRII) which helps provide guidance to Indigenous investors to focus their investment policy to reflect their traditional and cultural values. The RRII also is committed to assist non-Indigenous investors’ guidance to invest their invested funds in a manner that is consistent with the goals of the reconciliation movement within Canada.

There are billions of dollars in Canadian Indigenous trusts. How do you see those influencing the Canadian and Indigenous economies going forward?

NATOA, through it’s work within RRII, is one of the Indigenous organization partners with the Indigenomics Institute’s work and call for Canada to reach a $100 billion Indigenous economy within the next ten years. NATOA’s contribution to this work is the contribution of our Trust fund dollars within Indigenous communities local and regional economies. More importantly through the RRII work, Indigenous investors can utilize their rights as a shareholder in Canadian and multi-national corporations to provide direction and correct inappropriate corporate behaviour through shareholder activism. By using our power at the shareholder table and aligning our goals with that of allied investors such as foundations, pension funds, and religious investors, corporate engagement that is consistent with the guidelines set out by the United Nations Declaration of the Rights of Indigenous Peoples and the 94 Calls to Action by the Truth and Reconciliation Commission Report will provide, as a by-product, sustainable Indigenous economic growth.