The Central Bank of Nigeria (CBN) has fixed the tenure of the Managing Director/CEO of a bank at a maximum period of 12 years, effective from August 1, 2023.
The CBN also pegged the tenure of the Deputy Managing Directors/Executive Directors of a bank to a maximum period of 12 years.
This was contained in the apex bank’s new Corporate Governance Guidelines for Commercial, Merchant, Non-Interest, and Payment Service Banks in Nigeria on Friday, July 14, 2023.
The CBN, in the guideline signed by its Director, Financial Policy and Regulation Department, Chibuzo Efobi, noted that where an ED becomes a DMD, a cumulative tenure of 12 years applies and shall not be extended.
It added that the minimum and maximum number of directors on the Boards of Commercial, Merchant and Non-Interest Banks (CMNIBs) shall be seven and 15 respectively.
However, for a Payment Service Bank (PSB), the minimum and maximum number of directors on the board shall be seven and 13.
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The apex bank added: “Where a DMD/ED becomes an MD/CEO of the same bank, his/her previous tenure as DMD/ED is not included in computing his/her tenure as MD/CEO. Remuneration of MD/CEO, DMD, and EDs shall be linked to performance and structured to prevent excessive risk-taking.”
The CBN also authorises the board, subject to CBN’s approval, to appoint the MD/CEO, Executive Directors as well as senior management staff.
It said: “The Board shall approve a succession plan for the MD/CEO, other EDs and senior management staff, which shall be reviewed at least once every two years.
“The Board shall consist of Executive and Non-Executive Directors. The number of Non-Executive Directors shall be more than Executive Directors on the Board and its Committees.
“Members of the Board shall be qualified persons of proven integrity and shall be knowledgeable in business and financial matters, in accordance with extant Guidelines on competency and fit and proper persons for the Nigerian banking industry.”
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