Warriors, Rainmakers, and the Agency Problem
“He who is a hired hand, and not a shepherd, who is not the owner of the sheep, sees the wolf coming, and leaves the sheep and flees, and the wolf snatches them and scatters them. He flees because he is a hired hand and is not concerned about the sheep.” John 10:12-13
In the corporate world, directors are elected by shareholders to govern a given company. In turn, directors appoint executive managers (CEOs, CFOs, etc…) to administer the day-to-day operations of the company. These executive managers are agents of the company and therefore have a fiduciary responsibility to maximize shareholder value. Unfortunately, the personal interests of managers sometimes conflict with the best interests of shareholders. This moral hazard is known as the “agency problem”. In an agency problem situation, a manager is incentivized by the business environment to spend company money for his own benefit in a way that does not increase or preserve shareholder value. In the church world, deacons are elected by church members to govern a given church.1 In turn deacons, appoint pastors to administer the day-to-day operations of the church. These pastors are agents of the church and therefore have a responsibility to do what is best for church members. Unfortunately, the personal interests of pastors sometimes conflict with the best interests of church members. In Georgia and beyond, the Cooperative Program of the Southern Baptist Convention provides the biggest agency problem for the pastors of local churches.
An indignant Mike Stone, pastor of Emmanuel Baptist Church, in Blackshear, GA once learned that a candidate for the presidency of Southern Baptist Convention pastored a church that gave only 0.27% of its budget to the denomination’s Cooperative Program (CP). That candidate was Ronnie Floyd and that church was the First Baptist Church of Springdale, Arkansas. In reference to Floyd’s candidacy Stone remarked, “In thousands of churches this fall, faithful pastors will face skeptical finance committees at budget preparation time. He will go out to bat to keep CP giving strong even in light of building programs and tight budgets. The last thing that warrior needs is for his finance committee chairman to…read that Southern Baptists elected a president whose church gave .27 percent.” Eight years later, in 2014, Floyd would be nominated again. He won. His church had increased its Cooperative Program giving by thousands of dollars. Floyd’s profile, by his election, has been raised significantly. Lucrative publishing and speaking opportunities come with such an enhanced profile.
In the business world there is a term for men who are adept at bringing new money into a company, a “rainmaker”. Mike Stone’s comments evidence that, in order be elected or appointed to an office in denominational life, a pastor is expected to be a rainmaker for the state or national convention. Unfortunately, to be a rainmaker for the denomination a pastor must successfully convince his church’s directors that local church money should be sent from his local church and to the convention. Therein lies an agency problem. Mike Stone, who is typical of convention-minded Georgia Baptist pastors, sees himself as a “warrior” whose job it is to go to his own church’s “skeptical” finance committee and convince it to divert money away from the church’s own mission programs to the state and national convention. This provides little benefit for the average church member but it sets the pastor up for rainmaker status in the convention. Committee appointments and lucrative convention jobs await such men, who often leave their local church to take higher paying denominational jobs after being “called” to do so. Shouldn’t local pastors “go to bat” for their local flock, their own church members?
Should pastors see themselves as “warriors” who have to convince finance committees to invest in missions? The reader should ask himself if he has ever met a Southern Baptist who needed convincing that missions needed to be funded. The reader should ask himself if a shepherd should view himself as a “warrior” beset against his own deacons. The Cooperative Program incentives local pastors to become rainmakers for the denomination more so that it encourages them to be stewards of their local church.
Since this is happening in local churches throughout the country, it represents much more than an agency problem.
[Contributed by Seth Dunn. For more information on the hazards of the Cooperative Program, download my free e-book, The Cooperative Program and the Road to Serfdom]
*Please note that the preceding is my personal opinion. It is not necessarily the opinion of any entity by which I am employed, any church at which I am a member, any church which I attend, or the educational institution at which I am enrolled. Any copyrighted material displayed or referenced is done under the doctrine of fair use.
1This is a reality more so than a proper example of church government.
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Certified Public Accountant