The Central Bank of Nigeria (CBN) has reviewed the tenure of executive management and non-executive directors of banks and other financial institutions.
This was contained in a circular signed by Chibuzo Efobi, director of the financial policy and regulation department of the Central Bank of Nigeria.
According to the apex bank, this is part of measures aimed at strengthening governance practices in the banking sector.
CBN noted that the tenure requirements shall apply effective on February, 24, 2023.
“The tenure of Executive Directors(ED), deputy managing directors(DMD), and Managing Directors(MD) shall be in accordance with the terms of their engagement approved by the board of directors of banks, subject to a maximum tenure of 10 years,” CBN said.
The apex bank said “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 12 years.
“However, for an executive who becomes a DMD of a bank or any other DMB, his/her cumulative tenure as ED and DMD shall not exceed 10 years,” CBN said.
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“Non-Executive Directors (NEDs), with the exception of Independent Non-Executive Director (INED), shall serve for a maximum period of 12 years in a bank, broken into three terms of four years each.
CBN added that “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 4 years 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,” CBN said.
“The cumulative tenure limit of EDs/DMDs, MDs, and NEDs across the banking industry is 20 years,” the apex bank added.
