The Board could do this because the Local Government Official Information and Meetings Act (LGOIMA) contains a veto power:
Where a recommendation is made under section 30(1) to a local authority, a public duty to observe that recommendation shall be imposed on that local authority on the commencement of the 21st working day after the day on which that recommendation is made to the local authority unless, before that day, the local authority, by resolution made at a meeting of that local authority, decides otherwise and records that decision in writing.
(My emphasis).
The OIA also contains a veto power, but it has not been used since 1987, and its use now is constitutionally unthinkable - so unthinkable that the Law Commission has recommended that it be removed. So why do we still let local authorities and their subsidiary agencies veto the Ombudsman? It seems utterly contrary to the rule of law. The legitimate interests in secrecy are already protected by the Act. And local authorities should just have to lump it.
What the Independent Maori Statutory Board did was quite unconstitutional. And their petty secrecy and refusal to accept the rule of law should be the death knell for this unconstitutional power of secrecy.