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FRC Code : The issues and controversies

frc - FRC Code : The issues and controversies

Opinion

FRC Code : The issues and controversies

The Financial Reporting Council of Nigeria (FRCN) issued National Codes of Corporate Governance (the Code) for the private, public sectors and not-for-profit organisations in Nigeria, a few years back.

This was done following a Federal High Court ruling that FRCN has the powers to issue the Codes. The Codes are aimed at enhancing management credibility, preserving long-term investments, improving access to new capital and lowering cost of capital.

It will, according to government, also help to drive increased transparency and accountability in financial reporting through enhanced disclosures in financial statements thereby supporting investment decisions and shareholders’ value.

Compliance with this code is said to be mandatory for all public companies (whether listed or not) and all private companies that are holding companies or subsidiaries of public companies.

It did not stop there. It also mandated private companies that file returns to any regulatory authority other than the Federal Inland Revenue Service and the Corporate Affairs Commission to comply.

However, the Code is not mandatory for companies with eight or less employees, regardless of status of such companies. But, the not-for-profit sectors are encouraged to comply with the provisions of the Code. Where they do not comply, they are required to justify the reason for non-compliance.

Yet, there was a snag. A section, which was revised in October 2016, added that founders/leaders of not-for-profit organisations should resign after spending “more than 20 years (in office) or is age 70 years and above” and hand over to successors who are not their family members. Incidentally, this is where the religious bodies belong.

Incidentally, not many knew about this Code until the revered General Overseer of the Redeemed Christian Church of God (RCCG), Pastor Enoch Adeboye, stepped down as head of the church in Nigeria. Adeboye’s pronouncement came with a mixture of surprise and anxiety for his ministers.

He made that declaration at the church’s Annual Ministers Thanksgiving held at the Redemption Camp in Ogun State. In his story: From lecture hall to global pulpit, Adeboye reportedly stunned his bemused followers when he alleged that government had been meddling with the affairs of churches in Nigeria.

He went on to state that he was stepping aside in compliance with the section of the governance code that stipulates mandatory office tenure for general overseers of all registered churches. But, Adeboye’s ministers were not the only ones jolted by what was unfolding.

Other Nigerians were taken aback and have been reacting since then. Indeed, Adeboye’s resignation as the head of RCCG literally threw the nation into confusion.

Though, the government, probably feeling the pulse of the nation and the sentiment of religiosity, quickly reversed itself and sent the FRCN boss, Jim Obazee, packing.

These resultant actions touched the sensibility of the populace and divided opinions. The body of Christ, Muslims and other Nigerians have been interpreting what they termed the undercurrent intentions of the whole brouhaha.

For instance, Bishop Stephen Ogedengbe, founder and head of Evangelical Ministries (Wisdom Chapel), located in Shasha, Lagos, told Saturday Telegraph that the Financial Reporting Council of Nigeria has an ulterior motive.

“How can you say the assignment of God should be 70 years? That shows that if we were in the days of the Bible when God called Abraham at the age of 75 years, Abraham will not be able to perform. Moses also got the mandate from God to liberate the Israelites at the age of 80 years.

“As a matter of fact, somebody can pick up leadership of a church just at the age of 70 if that is his time to take over.

So, 70 years for retirement when it comes to spiritual assignment and Godly work, is totally out of it. We are not talking about conventional business; we are not talking about a civil service structure. “For me, the code is anti-people.

The government should focus its energy in creating the needed jobs and stop causing confusion. Do you know how many people Pastor Adeboye is leading?

How many churches he is leading? And you are just asking him to retire and leave it. In any case, all the establishments of these churches except their auditoriums pay their taxes including the workers there.

That code, to me, is a shame.” Tony Egbe, a pastor at the RCCG, Liberation Parish, Ogba, Lagos, differs a little bit. He argued that if the code means bringing co-ordination in governance, there is nothing wrong with it.

But the secular, according to him, should not mpose its rule on the spiritual aspect. “So, if a church for instance, feels comfortable with a leadership, I don’t believe it is in the place of the government to insist on a change because I believe that the lasting change is the one that comes from the Redeemed.

When we have family churches that have been there for a long time and the church members are comfortable with their pastors, irrespective of how long they have been there, I will not support the idea of any external body coming in to change the leadership.

“This is because such action may not necessarily guarantee that the person coming in is better. But, where it relates to NGOs and all other bodies, yes, it is okay for accountability but the church is accountable to God and not to man or the state.”

For TMC Amir and YABATECH senior lecturer, Dr. Luqman AbdurRaheem, it is not out of place to regulate non-profit organisation including religious bodies to avert anarchy. He said that government has a responsibility to provide direction for all stakeholders, public and private sectors and non-profit making sector.

“Really, I think looking at the law generally, it is good but we are not ripe for it now because the governments, even at the local government level, are they accountable in terms of their financials?

Are they transparent? Look at the way the budget is passed, for instance. So, what they tried to do is good but we are not ripe for it.

“I think when the law was being considered, they never had a robust interface with the non-profit making sector including the religious organisations, so that they let them know what exactly they are out to do.

Succession is in your own interest, so that you retire early and ensure that somebody who is coming is properly groomed.

But the way it is hurriedly done, so many people don’t know what it is all about and it is passed into law and implementation just started.

“Look at Baba Adeboye; it’s a shock to him. You must prepare your successor and you must ensure that when you are exiting, your retirement benefit is well guaranteed. So, I think these are some of the things that give religious leaders hypertension.

Yes, there is tension within the NGOs because some of them have skeleton in their cupboard; some of them are not transparent, and some are not accountable. It is good in such areas. AbdurRaheem noted that it may not affect Imams much because of the Islamic structure.

“If you look at the Ansar-Ud- Deen for instance, it was founded by some elders, they never owned it; it was set up but they never owned it. So, issues of ownership transferred to your children are totally out of it but when you set up a mosque, even if you donate the land, it belongs to the community.

The community owns it, they contribute money and they have committees who run and coordinate it and at the exit of the owner, who most times are not the Imams, they simply appoint who leads them.”

In like manner, a BoT member of Guild of Muslims Professionals, who doubles as a senior lecturer at the University of Lagos, Dr. Tajudeen Yusuf, also believes the religious organisations have a duty to comply with the code.

“If they are collecting money from people, they must be accountable because if you say you’re setting up a mosque or a church and you’re collecting money, is that money yours? You have held yourself out as a non-government organisation and there are rules guiding such organisation in the country.

“However, this government should be very careful, Nigerians are watching. Why should the same government suspend the code and sack Obazee because it has affected some people?”

Meanwhile, the Christian Association of Nigeria (CAN) has said the law, regulating the tenure of the heads of notfor- profit and religious organisations, was created to weaken the church in the country.

CAN’s National Director, Legal and Public Affairs, Kwamkur Samuel, said though the government was hiding under the “good motive” to regulate the excesses of those organisations in Nigeria and ensure prudent management of offices and resources, there were ulterior motives behind the law.

He likened the law to a similar one in the past, which compelled churches in Nigeria to surrender their mission schools, built by missionaries and churches to government.

Lawyers have also been reacting to this development. For instance, a rights activist, Ebun-Olu Adegboruwa, said churches, mosques and other not-for-profit organisations, as long as they are registered with the CAC, were bound by the financial regulation targeted at ensuring financial transparency and seamless succession. Adegboruwa who is also an RCCG pastor, said:

“The plan of succession must not be to the benefit of a family member. By law, churches are called incorporated churches with a board of trustees.

It cannot be run by a family.” But, a Senior Advocate of Nigeria (SAN), Chief Niyi Akintola, faulted the enactment of the legislation by the FRCN, describing it as illegal.

He said: “It is totally unconstitutional. Every enactment of the National Assembly is subject to the provisions of the Constitution of the Federal Republic of Nigeria.

“I was disturbed when I read about the so-called Corporate Governance Code by the FRCN that requires owner of churches to vacate office after 20 years.

Why should this be so? Were they the one that established the churches for them? I think we are having all these problems in the country today because the culture of silence has been so pervasive in Nigeria.

 Report by Isioma Madike
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