The Central Bank of Nigeria (CBN) has revised the regulatory requirements for the tenure of executive management and non-executive directors of deposit money banks and financial holding companies limiting their cumulative tenures within the banking sector to 20 years.
The apex bank disclosed this in a circular to all banks dated February 24, 2023 and entitled: ‘Re: Review of tenure of executive management and non-executive directors of deposit money banks in Nigeria.’
According to the circular, the regulation was in line with the Code of Corporate for Banks and Discount Houses (Ref: FPR/DIR/CIR/GEN/01/004).
In the memo signed by the director, financial policy and regulation department at CBN, Mr. Chibuzo Efobi, the tenure of executive directors, deputy managing directors and managing directors, 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.
It further stated that where an executive, who is a deputy managing director becomes the MD/CEO of a bank, or any other deposit money bank before the end of his or her maximum tenure, the cumulative tenure of such executive shall not exceed 12 years.
“However, for an executive director (ED), who becomes a DMD of a bank, or any other DMB, his or her cumulative tenure as ED and DMD shall not exceed 10 years. NEDs, with the exception of independent non-executive directors (INEDs), 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 or 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 exits from the board of a bank either upon or prior to the expiration of his or 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 limits of EDs/DMDs/MDs and NEDs across the banking industry is 20 years. Please be guided accordingly,” the CBN stated.
