•What regulation says about NGOs’ leadership, finances, others

By Tope Adeboboye

It was one announcement that not many had anticipated. No one saw it coming. Not even in the annual late December cum early January deluge of prophecies where Nigerian clerics divulge events that would define the New Year, as purportedly revealed to them by God, was it mentioned.
Indeed, not a single prophet predicted that at the beginning of 2017, Pastor Enoch Adejare Adeboye, General Overseer (GO) of the Redeemed Christian Church of God (RCCG), would relinquish his revered office and appoint another pastor to oversee the church in Nigeria. The news came out of the blues, jolting millions of Nigerians like a series of sudden thunderclaps at the peak of the harmattan.

GO Worldwide or Global Missioner?
But even with the announcement allegedly made at the Annual Ministers Conference of the church at Shimawa, Ogun State, a cloud of confusion still hovers over the actual status of the man of God.
Shortly after the news started making the rounds on Saturday, January 7, a release was issued by the personal assistant to the man of God, who is also the pastor’s son, that his father would retain the General Overseer Worldwide title while another overseer had been appointed for the church in Nigeria.
Another release issued by Pastor J.F Odesola, the Assistant GO (Admin), said Pastor Adeboye would remain as Spiritual Leader and Global Missioner of the church. And yet another statement by Pastor Segun Adegbiji, Head of Media and Public Relations of the church, said Adeboye would now pay greater attention to global evangelism.
All the statements explained that the changes in the church administration were in compliance with the national code on corporate governance 2015 for not-for-profit organisations.
But not too many Nigerians seem to have an idea on what the ‘code’ was all about.

What the FRC says
The Financial Reporting Council of Nigeria (FRC) is a body under the Federal Ministry of Industry, Trade and Investment. The council’s vision is to “be the conscience of regulatory assurance in financial reporting and corporate governance in Nigeria.”
Its mission, as stated on its website, is “to bring utmost confidence to investors, reputation to oversight and ensure quality in accounting, auditing, actuarial, valuation and corporate governance standards and non-financial reporting issues.”
The FRC says its main objectives, which are spelt out in the FRC Act 2011, include, among others, to protect investors and other stakeholders interest; give guidance on issues relating to financial reporting and corporate governance to professional, institutional and regulatory bodies in Nigeria; ensure good corporate governance practices in the public and private sectors of the Nigerian economy; ensure accuracy and reliability of financial reports and corporate disclosures, pursuant to the various laws and regulations currently in existence in Nigeria; harmonise activities of relevant professional and regulatory bodies as relating to corporate governance and financial reporting; promote the highest standards among auditors and other professionals engaged in the financial reporting process; enhance the credibility of financial reporting; and improve the quality of accountancy and audit services, actuarial, valuation and corporate governance standards.”

Codes of controversy?
According to Section 50 of the Financial Reporting Council of Nigeria Act, 2011, the Directorate of Corporate Governance of the FRC is required to, among other things, develop the principles and practices of Corporate Governance applicable in Nigeria. The National Code of Corporate Governance released by the council was to take effect from October 17, 2016.
Three codes were developed, including the Code of Corporate Governance for the Private Sector, the Code of Governance for Not-for-Profit entities and the Code of Governance for the Public Sector.
While the code for the private sector is mandatory, that of not-for-profits, which includes religious organisations and civil society groups, among others, has the caveat: “comply or justify non-compliance.” What that means is that the regulation must be complied with, or reasons must be adduced if the provisions would not be complied with by any non-profit organisation.
The council noted that the third code, which deals with the public sector, would not be applicable immediately until the Federal Government issues an executive directive on it. “This is due to the fact that the enabling laws that set up most government establishments already carry some form of governance structure that will require an umbrella legislation to unify the different provisions of those laws to synchronise with this Code,” the FRC explained.

Not a code for only churches
The code for Not-For-Profit Organisations (NFPO) developed by the FRC is contained in a 29-page document that can be downloaded from the FRC website.
Organisations that qualify as non-profits, according to the FRC, are many and diverse.
Charitable: Groups under this include, homeless shelter, disability, youth empowerment, hospital, healthcare clinic, animals’ right group, human rights group, para-military (scout, brigade, etc.), emergency relief group, philanthropic organisation and any other charitable organisation.
Educational: Under this are schools (primary, post primary, tertiary, vocational, etc), childcare centre, adult education centre, conservation group, wildlife, museum, library and any other educational organisation.
Professional and Scientific: Under this grouping, the FRC lists research centre, group or foundation as well as professional group (environmental, engineering, medical, etc.)
Religious: Religious organisations that qualify as non-profits include the temple, church, mosque, synagogue, seminary or Bible college, relief or charitable group with religious base/principles, any other religious body, mission or society.
Literary/Artistic: Bodies under this grouping include concert centre, theatre group, art gallery, music group and orchestra, artists, writers, poetry organisations, art theatre and any other literary/artistic organisation
Political /Administrative Grouping: Organisations under this group include political parties, political observers, political pollsters, lobbying groups and trade groups like Chambers of Commerce, Business Councils, and the like.
The list of not-for-profit-organisations also includes social and recreational clubs and associations as well as trade unions. The council says the list also includes organisations with similar missions but not deemed classifiable under any of the above categories by the founders or governing bodies of such organisations.
But it seems the laws of the FRC are not cast in stone. The council emphasises that organisations that might not be willing to comply with the provisions must give reasons they would not be complying.

How non-profit organisations should be run
The FRC also stipulates how the non-profit organisations should constitute and run their boards. For instance, it says the Governing Board of each organisation shall convene a general assembly or an annual general meeting each year in addition to any other meeting as may be provided for in its Constitution/Articles of Association or other statutes. The council also insists that a Board of Trustees must be constituted, adding that the Chairman of the Board of Trustees shall be appointed by the members of the board.
The functions of the board are also specified by the FRC. The council stipulates that the chairman of the Board of Trustees shall not act as the chairman of the governing/executive council, and that members of the Board of Trustees, who are members of the governing board should not participate in the day-to-day management of the NFPOs.
The governing board, according to the FRC, shall be the principal governing body of the NFPO and shall exercise appropriate governance functions set out in the organisation’s Governance Charter.
The code further says: “The role of the Governing Board shall include: (a) determining, reviewing and maintaining the vision, mission and values of the NFPO; (b) approval of short and long-term strategies of the NFPO; (c) approval of the annual budget of the NFPO; (d) approval of expenditure over pre-specified limits; (e) appointment, performance evaluation and determination of the employment of the Chief Executive Officer and possibly other senior managers; (f) risk oversight; (g) providing a check on the integrity of external financial and non-financial reports; (h) any additional monitoring of the activities of the NFPO in order to satisfy itself that the NFPO is being properly managed; and (i) engaging with key stakeholders.
The FRC code also speaks on the composition of management committees for the NFPO and the roles of the members of the committee.

Why pastors, church founders are angry
Tenure of founders/leaders
Perhaps, the most controversial aspect of the regulations, especially as regards religious organisations, is the section that explains the position of the founder or leader of the organisation. It is specified in Section 9 of the code.
It reads: “The Founder or Leader of a NFPO occupies a special position in the organisation and is committed to the success and longevity of the NFPO. Accordingly, a Founder or Leader should not take on too many responsibilities in the organisation or have an indefinite term in the running of the organisation.
“Where for any reason, a Founder or Leader of NFPO also occupies any of the three governance positions of Chairmanship of the Board of Trustees, the Governing Board or Council, and the Headship of the Executive Management (or their governance equivalents), the following provisions shall apply before the end of the organisation’s financial year in which this Code takes effect.
“The Founder or Leader shall cease to occupy these three governance positions simultaneously. This is to ensure the separation of powers and avoid possible concentration of powers in one individual.
“The Founder or Leader may, however, choose – subject to the agreement of the organisation’s apex authority as expressed in the Annual General Assembly, Annual Meeting, Annual Stakeholder Engagement, Annual Conference, Annual Synod, Annual Fellowship Assembly or their equivalents – only one of these three governance positions subject to his current tenure. This is to ensure a clear division of responsibilities at the head of the organisation between the running of the governing body and the executive responsibility for the management and fulfilment of the organisation’s mission.
“Where the Founder or Leader has occupied all or any of these three governance positions for more than 20 years, or is aged 70 years or above, the choice in section 9.2.2 above should only relate to the Board of Trustees as in section 9.4(c) below, except the constitution of the organisation otherwise provides.
“In the case of religious or cultural organisations, nothing in this code is intended to change the spiritual leadership and responsibilities of Founders, General Overseers, Pastors, Imams and Muslim Clerics, Presidents, Bishops, Apostles, Prophets, etc., which are distinguishable from purely corporate governance and management responsibilities and accountabilities of the entities.
“Conflicts with Founders or Leaders should, therefore, be addressed by: Recognising and respecting past achievements and strategy of the Founder or Leader with assurances that change has become inevitable to enable his dream live on; making provisions if not already in existence, or drawing the Founder’s or Leader’s attention to the maximum tenure already stipulated by the Charter and imploring the Founder or Leader to respect it; considering and ensuring Founder’s or Leader’s continued advisory or spiritual  role by creating a Board of Trustees (BOT) for which the original Founder or Leader can become the First or Life Chair; and (d) elevating deserving and senior members of the organisation to the Board of Trustees.”

Accounts, audit of assets and commercial activities of NPPO
Another part of the FRC code that might get religious organisations agitated is the Part D of the code, which talks of accounts and audit of the organisations and their assets.
The fairly long section partly reads: “The annual financial statement of the NFPO should be prepared in accordance with approved framework of accounting and financial reporting issued from time to time by the Financial Reporting Council of Nigeria.
“Audited annual financial statements shall be distributed to relevant stakeholders after the Audit and Risk Management Committee has reviewed them and the Governing Board has approved them.
“The Chief Financial Officer of the NFPO shall be responsible for preparing annual and other periodic financial statements.
“Depending on the size and needs of the NFPO and its stakeholders, in addition to the annual financial statements, the board may decide to commission and produce interim financial statements.
“Directors are stewards of the NFPO’s financial and other resources. The Governing Board should ensure that the financial resources are used to further the NFPO’s objectives and that the organisation’s funds are appropriately accounted for by regularly receiving and reviewing up-to-date financial statements and any auditors’ letter or audit and risk committee report.
“The Governing Board of NFPO should ensure complete inventory of all the assets of the organisation, both non-current assets and current assets wherever they may be situate, while also ensuring as far as possible both the possession and legal ownership.” The assets of an NFPO are donated to or acquired by the organisation in order to benefit the public good and are normally intended towards that use alone.
“The prohibition of NFPO assets being used for purposes other than the intended charitable objective makes it mandatory that founders, directors, managers and volunteers should not have control over them for personal use.
“Where any form of assets has been bought by the organisation for the use of a Founder or Eminent member, such assets remain under the control of the organisation, who also retains legal ownership.
“This position is different when members voluntarily donate cash or other assets outside the purview of the organisational control, as a gift to such persons, in which case, such assets belong to such persons personally. The basis of any personal donations or gift must be clearly stated to facilitate proper accountability for organisational assets.
“Where the organisation is involved or associated with another entity engaged in commercial activities, the profit from such ventures should be ploughed back into the funds of the organisation after accounting for all expenses relating to the venture.”

Whistle-blowers
The FRC also says the board of every NFPO should establish a whistle-blower policy that encourages individuals to report credible information on illegal practices or violations of policies of the organisation to the appropriate authorities. It also specifies that the organisation will protect the individual from retaliation and identify the parties to whom such information can be reported.

And church leaders kick
Many church leaders, including the leadership of the Christian Association of Nigeria (CAN), are not too comfortable with the FRC code relating to religious organisations, and some pastors have been kicking against the law.
Apostle Psalm Okpe, General Overseer, Fresh Oil Ministry, Lagos, told Daily Sun that the regulations were most childish.
He said: “If it is true that there is a law restricting the tenure of church leaders to 20 years, then, it is one of the most childish laws I’ve ever seen since I was born. What if the General Overseer started ministry at 70? The call of God and the law of the land are not the same. The call of God is a personal experience and encounter. I think government should be trying to revive the country, instead of passing a law on the church or Christianity, with regard to tenure of leadership.
“Government should not play God by deciding who comes into the ministry and who goes out of the ministry. It is the call of God. The call of God is not by age and His operations are not tied to age or tenure. So, the government should not assume the position of God. I don’t think it will fly. It won’t work, as far as I am concerned.”
Pastor Henry Kpalukwu, General Overseer, Glorious Fire Deliverance Ministry, Port Harcourt, said the promoters of such law were risking God’s wrath.
“The law is not good at all because it’s going to affect many people. In the days of the prophets, Elijah was a prophet of God until the day he departed the world. Elisha was a prophet of God until the day he died. Moses led the children of Israel until the day he left the world. It was the same thing with Joshua and all prophets of old and the apostles from Jesus Christ were in ministry till God called them to glory. So, why should such a law be made? As far as the work of God is concerned, it is not by human election. The call of God is by divine election. For Pastor Adeboye to handover, for example, it must be a decision from God. God must decide who takes over from him, not the government of Nigeria. It doesn’t matter how many years a General Overseer has been involved in ministry work. It is his business with God. Church leaders have business with God, not with man. Whoever is coming out with that kind of idea is trying to incur the wrath of God.”