The Central Bank of Nigeria (CBN) has put the cumulative tenure of Managing Directors, Executive Directors, and Deputy Managing Directors of commercial banks in the country at a maximum of 20 years.
With the reviewed tenure, no bank executive is expected to surpass 20 years from the time of appointment as executive or non-executive director to deputy managing director and managing director.
This was contained in a circular dated February 24, 2023, and addressed to all Deposit Money Banks (DMBs) by the CBN.
The circular titled, ‘Review of Tenure of Executive Management and Non-Executive Directors of Deposit Money Banks in Nigeria’, was signed by the Director, Financial Policy and Regulation Department, Chibuzo Efobi.
According to the circular, the revised regulatory requirements for the tenure of Executive Management and Non-executive Directors of DMBs and Financial Holding Companies in the Code of Corporate Governance for Banks and Discount Houses is part of measures aimed at strengthening governance practices in the banking industry.
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The circular, however, stipulates that the tenure of MDs, EDs, and DMDs “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.”
“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 (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 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 one 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 (three terms of four years each), shall serve out a cooling-off period of one 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 CBN stated.
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