The Central Bank of Nigeria (CBN) has recently authorized a revised corporate governance code, stipulating that the tenure of a bank’s managing director or chief executive officer (CEO) should not exceed 12 years.
The CBN shared this information through a 96-page circular posted on its website over the weekend. The circular, signed by Chibuzo Efobi, the director of the financial policy and regulation department, highlights that within an extended family, only one individual can hold the positions of CEO/MD/Chairman or Executive Director simultaneously. Previously, the CBN had announced that bank executives were limited to a cumulative tenure of 20 years across the banking sector.
However, the new regulation reduces the maximum tenure for managing directors to 12 years. The implementation of the new regulation is set to commence on August 1, 2023. The circular also states that the board must approve a succession plan for the MD/CEO, other executive directors, and senior management staff, which should be reviewed at least once every two years.