Written by Yinka Ogunnubi…
It’s somewhat difficult for me to do a thread on the code (that compelled Pastor Adeboye to step aside) because I share the sentiments of the community of faith concerning some provisions.
However, I have learnt that in the public square, facts and objectivity are what matters and not sentiments. So here I go God helping me.
I had the premonition that a controversy would be stirred once we got that famous breaking news that our beloved Daddy was “stepping aside”. The headline events of that last 24 hours confirmed my fears.
Let’s start by listing what is being said and implied so far:
- That President Muhammadu Buhari’s federal government is “dabbling” into Church leadership
- That the Governance Code has been suspended thus no need to comply.
- That the aw is targeted at weakening the Church and making it vulnerable to attack.
- That provisions of the code conflicts with Financial Reporting Council (FRC) Act & Companies and Allied Matters Act (CAMA).
First and foremost, in 2011 the Senate passed the Financial Reporting Council of Nigeria Bill which created the Financial Reporting Council. The FRC replaced the defunct Nigeria Accounting Standard Board (NASB) then under Jim Obazee who subsequently became FRCN Executive Secretary.
Under Act, the FRC (among others) was expected to ensure good corporate governance practices in the public/private sectors of the economy.
It’s in this light that it set out in 2013 to put together a Governance code (Public, Private and NGO), a draft of which it released in 2015. As expected, many stakeholders had issues with some provisions within the code but they were given the opportunity to make submissions.
The FRC was thereafter sued by some pastors representing Pentecostal churches in July 2015.
They sought six reliefs among which were:
- A declaration that the Not-for-Profit Codes 2015 is illegal and unconstitutional because it amounts to duplication of the functions of the Corporate Affairs Commission (CAC).
- That the terms of reference in Section 1 as well as Sections 8,9,10 and 37 are illegal and unconstitutional being inconsistent with Sections 7 and 8 of FRC Act.
Needless to say the plaintiffs who claimed to be representing Pentecostals lost the case in court as the court ruled in favor of FRC.
In light of the court order in its favor, the FRC went ahead to release the Governance Codes effective from 17 Oct 2016.
It came with a mandatory compliance for Private Sector and a “Comply or Justify Non-Compliance” for Not-For-Profit organisations.
Not long after the release, the Minister of Trade and Investment was reported to have written or issued a query (depending on who you believe) to the FRC to suspend the code until all issues it raised concerning it are resolved.
The Minister’s main queries were as follows:
- Was the Governance Code in line with the FRC Act? The combined reading of Section 2(1) and 10(d) of the FRCN Act suggests that. The Board will be responsible for the overall control of the Council and the Directorates. So how does the Code pass the test of compliance with the Act given that the FRCN Board is yet to be constituted?
- Does the Code supersede any legislation or any other Code? A subsidiary legislation cannot supersede a principal enactment.
The Executive Secretary was asked to explain the clear conflict(s) between the Code and various legislation inclusive of the FRC Act as well as others. For example, it implied the CBN will take on the burden of implementing the Code in the financial sector and it’ll also take precedence over the CBN Code.
I know that people have tried to link the fact the Minister of Trade is also a Pastor in RCCG to speculate on his true intentions, but to be fair to him there was nothing in his letter that suggested he was pushing a disguised church or RCCG agenda. Rather the contrary. His letter was more in line with concerns of the private sector than it was about concerns of leadership and succession for the church.
The expectation within the financial sector was that with the Ministers’ letter, the code was suspended. Wrong. Turns out the Executive Secretary disagreed. The FRC refused to honor the suspension request on the basis that it was not gazette. We wouldn’t have known this if not for Daddy GO’s decision
With this evidence alone, we can perish the notion of “Buhari is dabbling in Church leadership to weaken it”. It’s clearly not true. If anything, the evidence available to us points to the PMB admin trying to ensure that the code in its present form is not implemented.
In fact, it appears that the FG might be under intense pressure to sack Jim Obazee because of some “EFCC troubles” of his own.
Now, let’s go to the corporate governance codes (for Non-Profit) itself. By and large, what the code tries to do is to first enforce the minimum requirements of Part C of the CAC under which religious organisations are registered. For instance, religious bodies are supposed to make Annual Returns of its Financial Statements to CAC after audit.
Not-For-Profits also need to organize yearly Annual General Meetings where they present their annual financial statement to its members.
It reinforces the legal fact that any entity that collects money must “render accounts”, whether a bank, a business owner or a religious body. There appears to be no dispute about this requirement even among religious organisations.
However, there is the small issue of Tax. Should religious organisations be taxed when they engage in “For Profit” activities even if that activity is for the benefit of the organisation? Obazee and his team say yes. They must be taxed if they engaged in activities designed to extract financial benefit.
He put it like this.
“If they pursue non-charitable activities like running schools, hospitals, they’re to account for them separately as profit-making entities.”
This is one of the areas of conflict as many churches have subsidiaries under them that have blurred the lines between charity and profitability.
The second and obviously most contentious issue has to do with Tenure of the Founder. Now this is exactly what the code says:
Now understand that for an NGO, there are three governance organs: The Board of Trustees, The Governing Board and The Management Committee.
Now typically, and in most cases, the founder usually occupies the position of the head of these three organs at the same time.
So the code prescribed that:
- The founder can only head one of these organs
- If he already heads all of them, he needs to relinquish two
- If he has served as head of any of those organs for more than 20 years and is more than 70, he must resign expect for Board of Trustees.
Even with these provisions, the code recognised the unique position of founders as the “Spiritual Leader” of their organizations.
Meaning the code does not in any way invalidate the spiritual authority which these orgs subscribe to and to which they derive their relevance. The notion that these codes should not be applicable to churches as their matters are celestial and not terrestrial is utterly ridiculous. If they’re celestial as said by a SAN, then why seek registration under Part C of d CAC Laws? Why not just go to heaven to get registered? These organizations are legal entities known to law. They can sue and be sued. They can exist or cease to exist. They are very terrestrial. They are charitable organizations that survive on gifts and donations. They need to be transparent and accountable. This must be emphasized.
The issue that most concern me now is whether or not a minister has the power to suspend the activities of an agency known to Law. My take is that there are legal grounds to challenge the powers the FRC seems to be flexing. And we must pursue this to its logical end. Recall that this was the same agency used to illegally suspend a sitting CBN Governor. So the FRC as constituted is not without freckles.
My final take is that these governance codes are in the interest of the church and we should embrace it rather than fight it.
It will help to separate the wheat from the shaft and help bring transparency to the church and make us accountable to God and to man.
Yinka Ogunnubi is an author, a public speaker, and a board member of AdoptACamp Nigeria an initiative designed to help internally displaced persons in the country.