CBN’s tenure rule: Bank MDs to retire in 2 years

The new tenure rule by the Central Bank of Nigeria (CBN) has revealed three banks’ chief executive officers who will retire in the next two years.

The apex bank on Friday reviewed the tenure of executive management and non-executive directors of deposit money banks and financial holding companies.

To retire in the next two years in accordance with the new rule is Roosevelt Ogbonna, current managing director/CEO, Access Bank, whose tenure will expire in 2025, having spent a cumulative 10 years as an executive director in 2013 and group deputy managing director in 2017.

The CBN in a circular on Friday said where an executive director, 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 12 years.

Following is Ebenezer Onyeagwu, managing director/CEOs, Zenith Bank, whose tenure will expire in 2025. He was appointed as executive director in 2013.

The next CEO to retire in the next two years is Moruf Oseni, managing director of Wema Bank who had served for six years as executive director and four years as deputy managing director. Oseni will complete his cumulative 12 years tenure in 2025.

Appointed on June 2, 2022, Mudassir Amray, managing director of Union Bank has spent nine months cumulatively and will retire in 2032, according to data obtained from Proshares.

Adeola Kazeem Adetutan, managing director of First Bank of Nigeria is expected to complete his tenure in 2026, after being appointed as executive director in 2014. He has cumulatively spent eight years and two months.

The new rule pegs the cumulative tenure limit of executive directors (EDs), deputy managing directors (DMDs), managing directors (MDs) and non-executive directors (NEDs) across the banking industry at 20 years.

The circular, signed by Chibuzo Efobi, director of the financial policy and regulation department at the CBN, stated that for an 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.

Commenting, Ayodele Akinwunmi, an analyst at FSDH Merchant Bank, said “Good policy and will help the industry to develop a new generation of leaders so that there is no vacuum in theleadership of the sector.”

According to Proshares, given that a growing number of banks have opted for a Holdco structure most of them have found ample room to stay around the tenure limitation which has achieved little, if anything, in the last half-decade.

The only CEO caught by the ten-year rule in recent times has been Ifie Sekibo of Heritage Bank. The notion that bankers like Herbert Wigwe, former CEO of Access Bank; Segun Agbaje, former CEO of GT Bank, and Jim Ovia, former CEO of Zenith Bank would be caught by CBN’s new tenure arrangement is wrong.

The circular states that NEDs, with the exception of Independent Non-Executive Directors (INED), “shall serve for a maximum period of twelve years in a bank, broken into three terms of four years each.”

According to the circular, EDs, DMDs and MDs, who exit from the board of a bank either before or at the expiration of his/her maximum tenure, “shall serve out a cooling-off period of one year before being eligible for appointment as a NED to the board of directors.”