February 24, (THEWILL) – The Central Bank of Nigeria (CBN) Friday announced measures that will affect the tenure of Executive Management and Non-Executive Directors of banks and financial institutions, saying the move would strengthen the governance practices in the banking industry.
“Where an Executive who is a DMD becomes the MD/CEO of a bank or any other DMB before the end of his/her maximum tenure, the cumulative tenure of such Executive shall not exceed twelve (12) years.
“However, for an Executive (ED) who becomes a DMD of a bank or any other DMB, his/her cumulative tenure as ED and DMD shall not exceed 10 years.
“Non-Executive Directors (NEDs), with the exception of Independent Non-Executive Director (INED), shall serve for a maximum period of twelve (12) years in a bank, broken into three terms of four years each.
“EDs, DMDs and MDs who exit from the Board of a bank either upon or prior to the expiration of his/her maximum tenure, shall serve out a cooling-off period of 1 year before being eligible for appointment as a NED to the Board of Directors.
“NEDs who exit from the Board of a bank either upon or prior to the expiration of his/her maximum tenure of 12 years (3 terms of 4years each), shall serve out a cooling-off period of 1 year before being eligible for appointment to the Board of Directors of any other DMB.
“The cumulative tenure limit of EDs/DMDs, MDs and NEDs across the banking industry is 20 years.”
The circular added that the tenure requirements takes effect from 24th February, 2023.
THEWILL was unable to determine if any of the country’s bank management is affected by this review as at the time of writing.
However, a source in the banking sector said this move will force persons at ED, DMD, and MD level to leave early so that younger bankers can aspire to be at these positions instead of migrating to Canada, Europe, or America.
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