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Monday
Aug082011

The Need for an Independent Board of Directors & Financial Accountability

The day before C.J. announced his leave of absence on July 6, Dave Harvey, Jeff Purswell and Joshua Harris told me the Sovereign Grace Board of Directors was going to be expanded. I saw this as an opportunity to provide them counsel that might result in the creation of a new board characterized by independent thinking.  A Board where each director could judge and decide for himself without fear of repercussions; a Board which was not influenced by self-interests or governed by the will of the “top” Directors; and a Board where the President could not act unilaterally or independently like C.J. did for so many years.  I made 16 recommendations.

From: Brent Detwiler
Sent: Wednesday, July 06, 2011 11:52 AM
To: Bo Lotinsky; Bob Kauflin; C. J. Mahaney; Dave Harvey; Gary Ricucci; Gene Emerson; Jeff Purswell; John Loftness; Ken Sande; Pat Ennis; Tommy Hill; Tony Reinke; Adam Malcolm; Ben Wikner; Braden Greer; Brian Chesemore; Corby Megorden; Dave Brewer; Don DeVries; Eric Sheffer; Eric Simmons; Grant Layman; Greg Somerville; Issac Hydoski; Jamie Leach; Joe Lee; Jon Smith; Joshua Harris; Kenneth Maresco; Mark Mitchell; Matt Maka; Mike Bradshaw; Robin Boisvert; Benny Phillips; Dan McIntosh; David Bendinelli; Keith Jacob; Paul Palmer
Subject: Additional Board Members

Dave, Jeff and Josh,

Last night you wrote me, “We are expanding our Board of Directors to provide greater diversity of views and counsel.”  You may benefit from “greater diversity” but that is not your greatest need.  You need men who are honest, brave and bright – they are not gullible.  Here are my recommendations.

  1. You should add at least three new Board members (since you are embracing  a corporate model).
  2. They must not be pastors or paid employees of SGM.
  3. Each of these men must be financially independent and not beholden to SGM (or individuals on the current Board) in any fashion.
  4. These men must be independent thinkers, incorruptible with a stellar reputation for integrity, and courageous.
  5. They must be willing and able to speak up, ask hard questions, and address compromise of any sort – fiscal, personal, public.
  6. They cannot in any sense be yes men, puppets or pawns.
  7. They can respect the other Board members but they must not suffer from the fear of man in relation to any of the Board members.
  8. They should read and study all of my documents.
  9. They cannot be superficially involved in the governing of SGM.  They must be real directors!
  10. They must be intimately aware for all issues not just fiscal or practical.
  11. They must be intimately involved in the assessment of C.J.’s character and that of other Board members employed by SGM.
  12. They should not receive fees or generous gifts from C.J./SGM for their service on the Board.

I think of men like Chip Grange, Kevin Woodward, and Nelson Cooney.

Brent

Ken Sande responded to all the men by expressing his support.  He said, “I think Brent’s list of qualifications for board members contains some wise and biblical concepts that would apply to any board…including the one I serve.” 

After Ken’s email, I thought of four more suggestions that I added and sent on to everyone.

  1. The President moderates the Board but has no authority greater than any other Board member.  Acting independently of the Board is grounds for termination.
  2. All Board members have equal authority in directing SGM.  Employed Board Members do not have more authority than the non-employed Board members.
  3. Decisions should be implemented only when a majority exits among the entire Board of Directors.
  4. The non-employed Board members must have the same authority as the employed Board members in matters pertaining to the hiring and firing of any SGM employee (including the President). 

The next day, Dave Harvey posted, “A note on C.J. Mahaneys leave of absence and said the following about the newly expanded Board.

 “In addition to our search for an independent panel, we have taken other steps in response to these circumstances.  In order to secure a broader source of accountability and benefit from a deeper pool of wisdom, we have expanded the board to lead SGM in this season.  The current regional leadership team members, all pastors in SGM churches, constitute the additional board members: Craig Cabaniss, Mickey Connolly, Rick Gamache, Pete Greasley, John Loftness, Aron Osborne, Mark Prater, and Steve Shank.  We are grateful for the wisdom and experience these men bring to this board and for their willingness to serve in this capacity.  To facilitate continuity in our day-to-day operations, the new board has appointed Dave Harvey to act as the interim president during C.J.’s leave of absence.”

Here was my response.  I copied the old Board and CLC pastors but I addressed it to the new board members.  I included my recommendations.

Craig, Mickey, Rick, Pete, John, Aron, Mark, Steve,

Below are the recommendations I made for new additions to the Board of Directors.

I don’t think the direction C.J., Dave, Jeff and Josh have chosen is wise.  It won’t significantly increase people’s confidence in the Board.  In some cases, like with Steve and Mickey , it will undermine people’s confidence.  I am afraid a lot of people will see you as a bigger but not a better Board.  That is, it is still comprised of people with a lot of self-interest which undermines its independence.  As a result, folks won’t move away from the perspective that it is a puppet Board comprised of C.J.’s friends who worship him and failed to hold him accountable.    

Surprisingly, I never got a response.  Oops, sarcasm. 

This leads to another subject matter of importance.  The new Board of Directors needs to be completely open and honest about their compensation and benefits.  In the old days, we didn’t need a written policy to do this.  We simply agreed as an apostolic team to always reveal how much we made to anyone who asked us.  No hesitancy.  No cover up.  No fudging.  That’s what I did up to my resignation in 2007.

I planned to propose that C.J.’s salary be reduced to $80,000 during his leave of absence but first I wanted to get his current compensation so I contacted him.  In time, I came to realize none of men on the new Board felt he was unfit in any way for any kind of ministry.  So from their perspective such a proposal was absurd.  Nevertheless, here’s what I discovered in the process.

Brent - July 1

"What is your current salary?" 

C.J. - July 2

"Here is what I can say today.  Next week the board is meeting to consider and decide all matters related to me and my future.  I have withdrawn myself from the board and won’t be participating in this meeting.  And just so you’ll know, earlier this year I requested a second salary reduction [the first request was for 5k probably to help the SGM budget – I don’t know if it was enacted] and a number of weeks ago renewed that request, and it is my understanding that will be decided by the board next week as well."

Brent - July 2  

"What is your salary now after it was reduced?  In other words, how much was it reduced?  Your combined income for 2011 will be around 250k [that may be high, somewhere between 200-250k] not including many benefits like health insurance, retirement, etc."

Brent - July 2 

"Dave, Joshua and Jeff should be happy to see you answer all these questions without any hesitation.  And also the ones about your salary and reduction.  We’ve always promised to reveal that kind of information if asked.  You don’t need their permission.  That is not their prerogative."

C.J. - July 2 

"As for my salary it’s no secret and I’m not hiding it.  You know me well enough to know I don’t pay attention to it except to protest and say I am excessively overpaid (and it is the generosity of you and the other men that have made it so).  I think my salary [that likely does not include honorarium, gifts, royalties, car allowance, home care allowance, etc.) is 150,000 but I am not sure.  I will find out from Tommy but he is out of town this weekend.  My plan has been to ask the SGM board to reduce it 5,000 each year for the remaining years I would serve."

Brent - July 2

"Do I have your permission to get information from Tommy regarding your income and benefits including your recent cut in pay?"

Brent - July 2

"So do I have your permission?  The board has absolutely no authority over you in this matter!  Are you going to break all our commitments to be open and honest about our salaries and benefits?  Has that changed?  Are we now covering up our income from the good people of SGM?  Please don’t make excuses by referencing a gag order from the board.  That would be other example of avoiding honesty."

 I never heard from C.J. so I contacted Tommy Hill, the interim executive director for SGM.

 Brent - July 5

"Hope you had a good time on vacation!

"Could you provide me some information on C.J.’s compensation package?  I want to use the information so I can make an informed suggestion to the Board for a salary reduction.  I’d also like to understand the reason for the reduction at the beginning of the year…

"C.J. told me on Saturday, “And just so you’ll know, earlier this year I requested a second salary reduction and a number of weeks ago renewed that request, and it is my understanding that will be decided by the board next week as well.”  Can you explain this to me?  When was the first request?  For how much (e.g. 5k)?  Why was the request made – to reduce expenses or as an expression of discipline?  The same about the second request which was not acted on – when, how much, why?

Thanks Tommy.  I know this is not pleasant."

Brent -July 7

"Any hold up on the compensation figures for C.J.?  You can do that stuff in your sleep."

I waited two weeks before I wrote Tommy again.

Brent - July 19

"Can I get answers to my $ questions today?"

Tommy - July 20

"Brent, I am sorry for the delay.  Again, my priorities in serving administratively have not allowed me to drop into some of these details.  I sincerely regret to tell you that after discussion with the board that I cannot provide you with any more detail than I would anyone that asked about salaries at SGM.  Here are my guidelines in the midst of our current external evaluation by AoR.

  • I would be glad to discuss our salary setting policy, including our independent compensation committee involvement by phone.
  • If you still are interested in further detail, I can direct you to discuss with Dave (as president).
  • If an SGM church wants more detail on our salaries, I would again discuss our policy with them and then provide the information.

"But at the present, our plan is to direct those questions to AoR and will be asking their recommendations on how to address questions on salary, as well as Gammon & Grange.  Again, I would be glad to arrange a phone call to discuss our current salary setting policy.

"I am very sorry for the delay in getting back to you Brent.  It is a challenging time for all of us and I continue to pray for you and many others."

Given the pitiful response of the Board, I pressed the issue in the following email and copied Ted Kober and Ed Keinath from Ambassadors of Reconciliation.

From: Brent Detwiler
Sent: Thursday, July 21, 2011 3:59 PM
To: Tommy Hill; Aron Osborne; Craig Cabaniss; John Loftness; Mark Prater; Mickey Connolly; Pete Greasley; Rick Gamache; Steve Shank; C. J. Mahaney; Dave Harvey; Jeff Purswell; Joshua Harris; Adam Malcolm; Ben Wikner; Braden Greer; Brian Chesemore; Corby Megorden; Dave Brewer; Don DeVries; Eric Sheffer; Eric Simmons; Grant Layman; Greg Somerville; Issac Hydoski; Jamie Leach; Joe Lee; Jon Smith; Kenneth Maresco; Mark Mitchell; Matt Maka; Mike Bradshaw; Robin Boisvert; Ken Sande
Cc: Ted Kober; Edgar Keinath
Subject: C.J.'s Compensation & Benefits

Hi Tommy,

See the email trail below. 

I know you are between a rock and a hard place but would you send me the following.

  1. The written policy and date adopted by SGM Board that covers the disclosure of compensation for Board Members by Board Members or the comptroller.  And also the current written policy for getting compensation figures for Board Members and especially the President of SGM by the public.
  2. Please produce the written policy that allows the SGM Board to forbid an employee (i.e., C.J.) from telling someone his salary, etc. after promising to do so and stating, “As for my salary it’s no secret and I’m not hiding it….I will find out from Tommy.”  
  3. Send me the section from the Evangelical Counsel of Financial Accountability that allows the Board to require the President to withhold all information regarding his compensations from an individual or the public in general?
  4. When did the Board change our outstanding agreement to always disclose our salaries and benefits if ever asked?  It had to have happen after I left in Nov 2007.  Please send me the minutes that document this change.
  5. Thanks for the offer to talk by phone but I don’t need to discuss the salary setting policy since I was the one who developed it.  That is unless it has changed.  If it has send me those changes.  They should be in writing.  If not, please put them in writing and send.

My question does not concern salary setting; it concerns the actual amount of C.J.’s total compensation.  For-profit companies do not withhold this information for Board Members.  How much more should non-profits happily reveal the compensation of Board Members.  They are accountable to donors who have a clear right to know exactly what each Board member is being paid.

C.J. promised to disclose this information to me.  The Board forbade him.  That is unethical and it may be illegal.  Please tell your bosses they need to be accountable and transparent regarding their compensation and benefits.  They should immediately publish their total compensation and benefits for review by the public.

I am not so concerned for how much C.J. is making.  I am concerned that compensation information being withheld.

Sincerely,

Brent

As you can imagine, I never heard back from Tommy or the Board.  This type of scenario has played out time and again with C.J. and the Directors.  Promises are made and then broken without explanation.  Policy is concealed or conveniently changed.  Questions requiring accountable answers are ignored or never answered.  All the polity changes in the world at SGM cannot make up for a lack of integrity and genuine transparency.

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Reader Comments (35)

Luke 16: 10“Whoever can be trusted with very little can also be trusted with much, and whoever is dishonest with very little will also be dishonest with much. 11So if you have not been trustworthy in handling worldly wealth, who will trust you with true riches?"

Brent- thank you for what you are doing.

August 9, 2011 | Unregistered Commenter5yearsin PDI

Could you please elaborate on the status of Sovereign Grace Ministries? Are they currently functioning as a non-profit? If so, they are required under IRS rules & regulations to not only submit a 990 each year, but to also make that specific information available to anyone who asks. It is my understanding that several years ago the IRS made these changes so that anyone could (and should in my opinion) view the complete compensation packages of those employed. In this case, transparency is defined by the US Government, not SGM or it's board.

[Deb. Sorry I couldn't get any answers from Tommy Hill at SGM. Brent ]

From: Brent Detwiler
To: Tommy Hill
Sent: Tue, Aug 9, 2011 1:27 pm
Subject: Blog Question
I was asked this question on my blog today but don’t want to attempt an answer without your feedback. Please provide me your perspective.

From: deb bongiorno
Sent: Tuesday, August 09, 2011 5:52 PM
To: abrentdetwiler@gmail.com
Subject: Re: Blog Question

Mr. Detwiler,

I very much appreciate you taking the time to get an answer on this.

I should have clarified in my question; I'm not sure of the IRS status in which SGM currently functions. We supported SGM for over 2 decades but decided to no longer do so a few years ago. It is possible they are sending out that information to those who support them at this time. They are not a church but could be a religious organization which would most probably exempt them from these more in depth requirements, specifically regarding the full compensation packages of the top board members.

I can easily find this information on most non-profits quite easily. Quite honestly, it makes me very sad that any government requirement would have to be applied to necessitate that which God's people should be eager and willing to provide.

From: Tommy Hill
Sent: Wednesday, August 10, 2011 1:50 PM
To: Brent Detwiler
Subject: RE: Blog Question

Brent, I would be willing to discuss this question with you; but I am uncomfortable communicating with you by email knowing that you may choose to publish communications I have with you.

From: Brent Detwiler
Sent: Thursday, August 11, 2011 4:01 PM
To: 'deb bongiorno'; Tommy Hill
Subject: RE: Blog Question

I just want to make sure I state things accurately when people asked me about the legal status of SGM and filing requirements and what bearing those have on sharing compensation figures. So it is a simple legal question – at least to you. Not a gothcha question. That’s why I’d like it in writing.

I’d appreciate if you let Deb and me know.

From: Brent Detwiler
Sent: Sunday, August 14, 2011 10:50 AM
To: 'deb bongiorno'; 'Tommy Hill'
Subject: RE: Blog Question

Deb,

I don’t know why Tommy won’t answer our questions. Here’s my understanding. CLC is a 501(c)(3) charitable organization. As a church, however, they are not required to file a 990 form. SGM is an integrated auxiliary of CLC. Therefore, they are free from filing also. Legally, I think SGM is a part of CLC in some fashion. It will be interesting to see what comes of that in the future.

SGM is also a member of the Evangelical Counsel for Financial Accountability. As a member they are bound by their strictures. I have not had time to see if that includes the disclosing of compensation packages for Board of Directors.

Sorry I can’t be more helpful. I hope Tommy will provide us more definitive answers
Brent

P.S. I just checked the list of ECFA members. It doesn’t appear SGM is a member any longer. Tommy, when did we drop our membership?

August 9, 2011 | Unregistered CommenterDeb

Dave Harvey just doesn't get it! I truly do pray that the Lord open his eyes.

Unfortunately I DO NOT BELIEVE that Dave and many of the other Board members listen to the Holy Spirit. They are bent on focusing on what is best for THEM! Not Christ's church. This is all about protecting their jobs and their position.

Repent! Repent! Repent!!!

August 9, 2011 | Unregistered CommenterMikePhila

Simply unbelievable.

Thank you for your persistence, Brent. I contributed to SGM for over 20 years and find this shocking and saddening. It feels like a waste...especially since our family makes less than half of what CJ makes and is raising a large family.

If SGM pastors and board members and staff (anyone) is reading this, please take note. Those of us who have been loyal over many decades are kindly requesting an explanation and some real integrity. You have taught this and now you must live this. Your contributors can see right through this evasive behavior and your actions are catching up to you.

Stop defending CJ and start fearing the Lord.

August 9, 2011 | Unregistered CommenterMarian

As a member of an SGM church should CJ be transparent and accountable to me as to his salary and compensation, especially considering that our church is sending a tithe to the mother ship?

August 9, 2011 | Unregistered Commenterkmack

Brent, my hat's off to you for sheer perseverance. I have to say, though, that I'm amazed CJ, Tommy or any SGM person continues to correspond with you at all. I can't see they're under any legal obligation to do so.

August 10, 2011 | Unregistered CommenterDon

Brent -

Why in your current position do you care about CJ's compensation?

Like much of what I have read from your documents/comments/blog posts, there is an apparent gift of wisdom God has given you and then you appear to get caught up on some of detail, that as a reader seems to communicate bitterness, or an axe to grind, or a point to be made. Maybe your writings can be more clear as to the purpose of the "stuck on a small detail," so it doesn't seem that you are driven by bitterness. Just a suggestion.

August 10, 2011 | Unregistered Commenterseriously?

Brent,

Is it even remotely valid that one would claim not to know their own salary in SGM? Has this even been the case to your knowledge that one would not know what they make in SGM? Makes zero sense!

Thank you for pressing on, brother.


Franz

August 10, 2011 | Unregistered CommenterFranz Schneider

It always bothered me that we had to approach and "ask" about finances and that there was no where we could find it written. It is not like the average Joe would feel comfortable going up to CJ and asking how much money he makes. But it is our money that pays the salaries. It should be part of the financial statements.

August 10, 2011 | Unregistered CommenterMary

Looks like the dominoes are falling at SGM and CLC. Thanks for shaking the tree, rocking the boat, etc. Keep up the good work. We are praying for you all.

August 10, 2011 | Unregistered Commenterkmack

Brent,

Did you ever stop to think that maybe the board is hesitant to reveal ANYTHING to you anymore because they know you print every single word of every email? From an outside position looking in, it seems as though the board could justifiably refuse to give you salary information because you seem to spin everything in a negative light against them. It just seems as rather silly that we can simply demand and expect things from people only to then post them all over the internet. Wouldn't you be hesitant to say anything about your life at all if you knew someone will post it online and then others will twist it to be absolutely terrible (I am now speaking of the blogs that take everything you post Brent and use it to try and bury a gospel-preaching ministry)?

Anyway i'm sure i'll be thrashed for speaking my mind.

August 10, 2011 | Unregistered CommenterRob

You had better post my previous comment website editor...walk in the light like your boss preaches.

August 10, 2011 | Unregistered CommenterRob

Hi Brent,
how does one tithe, in faith, when they haven't a job, or are underemployed, when the shepherds (the servants, least among you, etc.) are receiving such huge salaries to include car and house allowances, etc? WoW... so are we, the sheep, to expect that pastors are really caring for the sheep when they teach us to give! when they teach us to give and use 10% as the baseline? as they encourage us to give even more and more and then give to the SGM fund and then give to the building fund... I love to give to God, but it appears we are giving to bankroll excessive salaries. If CJ is making that much mentioned above (apron 250k plus gold plating), even while on a leave of absence, how much are the rest of the SGM leaders making, not to mention the rest of SG pastors at all the various churches. Sounds like a scheme to me, want to get rich? - start a church! Lets get back to preaching what we walk, and walk what we preach. No wonder these guys are way out of touch with the average Christian (40-60k salaries?)?

August 10, 2011 | Unregistered CommenterItsMe

I understand our view with respect to gender is a tad different and you are quite complementarian (sp?) but perhaps selecting some women for the board may be a consideration. You believe in male pastors only therefore, the females wouldn't be in competition for positions of authority (particularly in the future)

If I am ccrrect and the board gives recommendations, there is no authority conflict.

I would bet the mortgage (if I was a betting woman) that you have a wealth of intelligent, wise, humble women that would be more than qualified to impartially listen to all sides and produce a sensible recommendation.

Just a thought.

August 10, 2011 | Unregistered CommenterDebra Baker

Rob
If SGM were not an auxiliary of a church it would have to file a Form 990 with the IRS and make it publicly available. That form would have a schedule on it that detailed the compensation, including all benefits, of the 5 highest paid employees. Should a church-based organization be less accountable because it is affiliated with a church? I would think you would want them to walk in the light.

August 10, 2011 | Unregistered CommenterInterestedParty

Brent wants it both ways; SGM must show him everything yet on his blog he will not acknowledge comments that point out his hypocracy.

[Seneca. My priority is to write posts. Due to limitations of time, I can't be monitoring and responding to all the comments. I've not allowed some comments beacuse I don't want blood baths to break out. Brent]

August 10, 2011 | Unregistered CommenterSeneca Griggs

To the poster above who objected to Brent's request for the details pertaining to a certain someone's salary package:

To my knowledge, in many mainstream Protestant denominations, such as the Methodist Church, Lutheran Church, Presbyterian Church, and Episcopal Church in America, not only is the pastor's salary know to all church members, but also they vote to approve it as a line item part of the church's annual budget.

And it sounds like the salaries of some SGM pastors are quite a line item. Hence Brent's questions seem reasonable to me; however, I concede you have a point in suggesting that SGM justifiably might not want to release salary info to a non-member or the public at large. Thus I would encourage SGM members to request the relevant salary information from the board directly.

On another note, I, too, find the idea that the head of SGM does not know his salary preposterous. I have lived in seven different countries, worked in at least four major industries, and I have never met anyone who did not know his/her base salary even if it was a small part of his/her total compensation package.

Best to all - Janna

August 10, 2011 | Unregistered CommenterJanna L. Chan

I agree that 150-250 K for a salary for a pastor is unnecessary. But the bible never condemns having a lot of money, but rather. It does condemn the love of money (especially for a pastor). Therefore C.J. Will be held to a very high standard when it comes to this issue. But I'm not so much interested in how much he makes (although in my opinion his salary should be known) but what I'm interested in is how much he gives (which in my God's opinion should not be made known -matt 6) -grace and peace

August 10, 2011 | Unregistered CommenterJerod

If CJ's reveals his income (which is fine if he does) I would also like to know how much of that does he give away. Lets say he is making 200k but he gives away 100k does that make it look better in everyone's eyes? Just wondering.

August 10, 2011 | Unregistered Commenterquestioning

did you lose my post from yesterday?

August 11, 2011 | Unregistered Commenterme

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