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FRC Corporate Governance Code 2016: An Attack On The Church? - Religion - Nairaland

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FRC Corporate Governance Code 2016: An Attack On The Church? by nahinbdis: 1:47pm On Jan 09, 2017
Since the news of Pastor Enoch Adeboye stepping down as the General Overseer of RCCG Nigeria broke, the print and social media has been awash with claims and counter-claims of the intents and purposes of the Financial Reporting Council’s Corporate Governance Code 2016. On one hand is the contention that the code is targeted at the leaders of major Nigerian churches, while on the other hand is the acclaim that the Code is a step in the right direction. But what does the code really say and what are the implications for the Nigerian Church?

The Not For Profit Organizations (NFPO) Governance Code 2016 is hinged on the need for good governance and orderly succession in NFPOs. As noted by the Code, the problem associated with the vision and mission statements of NFPOs is the integrity and ethical tenacity required for sticking to it’s vision, and the will to use it’s resources to ensure mission fulfillment. This is of utmost concern to donors and members, and is therefore a key defect that the Code seeks to address. In fact, the Code recognizes that conflicts with founders arise from the structural growth problems which small organizations worldwide face when replacing one-person management (or family management) with a more institutionalized structure, particularly as founders tend to want to maintain the status quo even after their individual or family management or informal board structure has become glaringly unable to match organizational needs. There is also a greater need for transparency and accountability in the conduct of the affairs of NFPOs. Being accountable means demonstrating regularly that the NFPO or leadership uses the resources available to it wisely, and does not take advantage of its special privileges to pursue activities contrary to its non-profit status.

The major concern of founders and leaders of various faiths however, is the seeming incursion of the Government into the affairs of the Church, going so far as to determine its leadership and its tenure. The Code sets up the Board of Trustees, Governing Board and the Management Committee as the governance positions of an NFPO. Of particular note is Section 6.8 which stipulates that the position of the founder has no special place in law, and that founders should realize that once an organization adopts a formal structure, they are bound by the charter or enabling document just like everyone else. By Section 8.1.3., a director or trustee (which by implication includes the founder if he is a director or trustee) may be removed by the members in general meeting.

By the provisions of the Code, a Founder of an NFPO cannot simultaneously be the head of more than one of the above governance positions of the NFPO. This is to ensure a clear division of responsibilities at the head of the organization between the running of the governing body and the executive responsibility for the management and fulfillment of the organization’s mission.

Very significantly, the Code stipulates in Section 9.3 that where the founder or leader has occupied all or any of the three governance positions for more than 20years, or is aged 70yrs or above, he can only be the Chair of the Board of Trustees, except the constitution of the organization otherwise provides. It is important to note that aside the Catholic Church and like orthodox churches, the founders/leaders of all the “major” churches in Nigeria have led their churches for more than 20yrs. This provision is akin to the Central Bank 10yr governance provision that by which it removed the Managing Directors of major banks in Nigeria. There is however some ambiguity as to the supremacy of the Code vis-à-vis the Constitution of the Organization as the Code subjects its tenure provisions to the provisions of the Organization’s Constitution. Therefore, when a Founder has led an NFPO for more than 20yrs or is more than 70years old, it appears he can remain in office as long as it’s Constitution so provides.

The Code however notes therein that its intention is not to change the spiritual leadership and responsibilities of founders/leaders of religious or cultural organizations and insists that these spiritual leadership and responsibilities are distinct from purely corporate governance and management responsibilities as well as the accountability of the entity. In reality, are they distinct?

PROS

Does the Code help the church in any way? I must submit that it does! Firstly, it would help to resolve the perennial succession issues that have troubled the church, as corporate governance principles include spelling out a clear succession plan. Troubling instances of contested succession, such as in the Assemblies of God Church would hopefully be a thing of the past.

Secondly, the Code would help to promote the accountability that has long been demanded of the leadership of NFPOs as they are now required to account for their actions or stewardship, including accounting for use of its resources. The Code describes an accountable NFPO as one that readily opens its books and records to public scrutiny by stakeholders, beneficiaries and donors.

In addition, exposing the books of NFPOs to public scrutiny would not only help to check financial abuse, it would also check the financing of extremist and terrorist activities. It is therefore in the interest of national security to continue to push for transparency and accountability amongst NFPOs.

CONS

The code appears to assume that man is intrinsically loyal and would not scheme out his benefactors. The reality however is that the Code introduces the politics of the boardroom into the Church, or heightens it where it already existed. A founder would therefore need to be continually assured of the loyalty of the directors to the vision of the NFPO lest he is voted out of the organization. Note that unlike companies where voting can be in line with number of shares owned, directors in NFPO appear to have equal voting powers under the code.

Secondly, the Code appears to be targeted at particular church groups in Nigeria bearing in mind that their leadership are aged 70 and above, with most having served more than 20yrs. However, these groups may be able to circumvent the code by amending their constitutions to provide for additional tenure for their founders, or making their Nigerian church as a branch of their global organization (this appears to be the model deployed by RCCG).

Most importantly, the Code signals the intrusion of Government regulation into the otherwise liberal structure of NFPOs in Nigeria, particularly as it relates to churches and mosques. Bearing in mind the secular nature of the Nigerian state vis-à-vis the near equal division of the country into Christian and Muslim faiths, the Code is viewed as a tool designed to muzzle religious organizations in general, and the Church in particular.

It is noteworthy therefore that though the Code on its own is not a declaration of war against the Church, it is a signal for the Church to sit up and watch, because more changes are coming.

What is your take?

http://growingsme.com/blog/2017/01/09/frc-corporate-governance-code-2016-an-attack-on-the-church/

Maxwell Asowata writes from Lagos, Nigeria.
Re: FRC Corporate Governance Code 2016: An Attack On The Church? by Raphael81(m): 5:02pm On Jan 09, 2017
Beautiful

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