For me, the real issues that should be up for consideration are – Is there anything in us that seems to compel us to personally appropriate institutions? Is there something about our culture that makes us anti-corporate in disposition? Why does everyone seek to personally own rather than pull together to jointly own? What is it that pushes the Nigerian to want to privatise the ownership of a political party, Church, NGO or a bank?
In the aftermath of what ordinarily could have passed as a routine administrative realignment within the fold of the RCCG, involving the General Overseer, Pastor Enoch Adeboye and the rash removal from office of the Executive Secretary/CEO of the Financial Reporting Council, Mr. Jim Obazee, brickbats are being hurled in different directions, with the Church at the receiving end of a lot of them. Yet, there are a number of groups and professionals who were never comfortable with the Governance Code issued by the FRC to ensure good corporate governance in public entities (for profit and not-for-profit), and are happy at the turn of events now, even if they will be reluctant to publicly admit this. But the issues have become all muddled up, largely hanging around the neck of the church.
Indeed, it was much ado about nothing. First, contrary to what has been peddled, there is really NOTHING in the Governance Code put out by the Financial Reporting Council which restricts General Overseers, Pastors, Imams and other Spiritual Leaders to a maximum of a 20-year tenure, where an organisation’s constitution has not provided so. That being the case, the position of General Overseer or Spiritual Leader can indeed be held for life, if the organisation’s constitution permits this.
The Code only expects for that office, if held by anyone who has spent 20 years in a Board/Management position, to stand separate from the offices which will be charged with the governance and management of the organisation. It does not ask for Founders/Spiritual Leaders to relinquish their positions.
The essence of the Code being to institutionalise an associated governance and internal control framework in the not-for-profit sector by ensuring that these four organs – General Assembly, Board of Trustees, Governing Board and Management Committee function as they should, with power not exclusively residing in the hands of one/few for the sake of accountability and corporate governance. It is within this context that the suggestion for a separation of powers can be easily put.
The confusion in many of the commentary stems from the mix-up between the FRC Act and the Code of Corporate Governance issued by the FRC. What had been in contention was the right of the FRC to issue such Code, but the court has now resolved that in its favour on the strength of the Act that set it up. So, the question of the regulations in contest being laws passed by the National Assembly did not arise.
To further put this in proper context, it was not just the FRC Code for not-for-profits that was contentious, the other regulations earlier issued were. Some professionals, especially accountants, did not like the fact that they had to personally take responsibility for audited accounts by affixing their practice details. Some corporate institutions did not like the code because of the more stringent requirements on corporate governance. Non-Governmental Organisations (NGOs), many of whom function more like Non-Governmental Individuals, were very concerned. That is understandable. Governmental agencies, including the Central Bank of Nigeria, were uncomfortable. Though the problem that has ensued has now been hung on the neck of the Church, the truth is that there is indeed a well-appointed mob behind the storm.
So, even though what the FRC had put out, especially for the for-profit sector, were largely good regulations meant to strengthen corporate governance and accountability across board, and they were, in fact, already doing that, given the level of opacity that governs most of what passes as management in public and private sectors, it was understandable that the organisation and the man at the helm of affairs will have more enemies than friends. Obazee might have earned respect outside Nigeria, given that strict financial reporting standard and governance mechanism is now of universal interest in the face of terrorism, with the desire for greater transparency about who is financing what and from what source, that definitely has not been the case back home.
I advised that should FRC decide to proceed with instituting the Code, irrespective of the issues raised, it is advised to adopt a phased approach, starting with less controversial, low-hanging fruits, ensuring to exclude the religious institutions, at least, in the interim, to avoid being caught up in a storm.
Then, there is the politics of it all. The more one might think he knows, the less he really knows. Given the combustible nature of religion, it was not necessarily tactically right to be pushing for corporate governance in that sector when even goings-on in the public sector leave much to be desired.
At a Public Hearing by FRC on the Code of Corporate Governance for ot-for-profits held on July 2, 2015 in Lagos, I had submitted that the FRC should take the following, among others, into consideration:
– That erecting such a lofty superstructure as desired by the FRC on an obviously weak substructure is not advisable;
– That the attempt to comply with global best practices should take into consideration local peculiarities;
– That the non-conformity with the code of corporate governance seen in the not-for-profit sector is not peculiar to it;
– That the challenge runs deep into the core of the defective structure upon which the nation is powered;
– That it must be recognised that Nigeria is largely an informal economy, with an informal structure governing the bulk of our activities across many sectors;
– That to seek to institutionalise and formalise financial reporting without considering the peculiarities of a largely informal economy amounts to putting the cart before the horse;
– That the nation is not short of good laws and codes, but the challenge of enforcement is situated in trying to foist rules in disregard of the systemic failure and the peculiarly informal nature of our socio-economic structure;
– That if we are not careful, this code might only serve to stifle and kill the sector that has kept the nation afloat, with the failure of governance at many levels.
There and then, I raised these queries:
Can we find reasons why a number of our NGOs operate more like NGIs (non-governmental individuals)?
Can we simply assume that this operational model is wrong or faulty simply because it does not conform to our expectations or that of the Western world, without rigorously interrogating the system at work there?
Are we sure that the relative success being witnessed in the sector is not a result of the peculiar nature of this structure that we now seek to disrupt?
How beneficial can this process which seeks to drag institutions that have taken the preliminary step of going formal underground?
Are we not, on account of this code, discouraging those in the informal sector from going formal?
What benefit does it serve to enshrine a code that might drive more people and activities underground?
What are the incentives put in place to encourage compliance? Is it wise that the government is only seen when it comes to enforcing rules without setting up a process to address challenges faced by operators?
I advised that should FRC decide to proceed with instituting the Code, irrespective of the issues raised, it is advised to adopt a phased approach, starting with less controversial, low-hanging fruits, ensuring to exclude the religious institutions, at least, in the interim, to avoid being caught up in a storm.
Difficult to tell how much of the listed above played on the mind of the decision makers at the FRC but I was assured that these concerns had been addressed. So, the issue is not really about the Church but one that should concern us much more. Unfortunately, many who have been waiting for an opportunity to take on the Church think they finally have one. Indeed, the Church does have issues with corporate governance and accountability, but which sector does not have? We have been told there are over 23,000 registered church denominations in Nigeria of which only 89 are said have complied with the rule. But how many of these Churches are really doing as well as many assume? Many might not know it, but the opulence that the Church is often criticised for is limited to a few, with many of the Churches/Pastors struggling to get by like many other Nigerians/entities.
The major challenge the Church faces is not even governance but that of perception. There are a number of Churches pulling their weight in terms of empowerment, people-development, charity work, social responsibility and nation-building. In the absence of a safety net, many of the vulnerable in the society wholly rely on Churches for their upkeep and other needs. But this is largely unreported as it is not deemed sensational enough to make headline news. A number of Church leaders have encouraged greater political awareness on the part of the people, with Pastors Okotie and Bakare having put themselves forward for high offices in the land. It does appear from pronouncements that an organisation such as the Pentecostal Fellowship of Nigeria (PFN) does recognise that there are issues with corporate governance within the Church but its capacity to self-regulate is itself limited, it being a collegiate of equals. On occasions where it has wielded the big stick by disowning impostors and those deemed not to be acting in conformity with acceptable tenets, the media has elected to extend the usual promotional courtesies towards those individuals.
What exactly is the FRC empowered to do to a not-for-profit entity in a case of non-compliance? The Code, as I see it, is very thin, in that regard. The best it offers is a referral of the entity concerned to the agency under which it was incorporated… What then is all the noise all about? For me, it has been much ado about nothing.
It is thus not right to seek to place this issue of resistance to good corporate governance at the feet of the Church. It is definitely not exclusive to it and there are many dimensions to the matter which the Code, well-meaning as it is, cannot address by fiat.
For me, the real issues that should be up for consideration are – Is there anything in us that seems to compel us to personally appropriate institutions? Is there something about our culture that makes us anti-corporate in disposition? Why does everyone seek to personally own rather than pull together to jointly own? What is it that pushes the Nigerian to want to privatise the ownership of a political party, Church, NGO or a bank? How is it that a man with a 10 percent stake in the ownership of a bank seek to exercise full and life-time control, claiming the bank to be his? Why do we seek to own 100 percent of a dying entity rather than a 10 percent of a thriving one? Is there any redeeming value in this attitude of ours?
Back to the Governance Code for not-for-profits, I will submit that, from my study, good as it is for ensuring accountability and good corporate governance, it does appear to be largely suggestive or advisory in the way they are couched. But in the hullabaloo that has ensued, this seems to have been lost. What exactly is the FRC empowered to do to a not-for-profit entity in a case of non-compliance? The Code, as I see it, is very thin, in that regard. The best it offers is a referral of the entity concerned to the agency under which it was incorporated.
What then is all the noise all about? For me, it has been much ado about nothing. It has been simply another case of an overreach without the much-needed interrogation of the issues calling for our attention.
Simbo Olorunfemi works for Hoofbeatdotcom, a Nigerian Communications Consultancy. Twitter: @simboolorunfemi