The term of Executive Management and Non-Executive Directors of Nigerian banks and financial institutions will be reviewed, the Central Bank of Nigeria (CBN) has stated. The CBN believes this would improve the corporate governance framework of the institutions.
The top bank noted that the maximum cumulative tenure for Executive Directors, Deputy Managing Directors, Managing Directors, and Non-Executive Directors throughout the banking industry will not exceed 20 years in the amended version for banks’ corporate governance issued on Friday.
The change, which was made public on Friday via a circular, limits the combined tenure of EDs/DMDs, MDs, and NEDs in the banking sector to 20 years. The circular further said that the tenure limitations will be in place starting on February 24, 2023.
The tenure of Executive Directors (ED), Deputy Managing Directors (DMD) and Managing Directors (MDs) shall be in accordance with the terms of their engagement approved by the Board of Directors of banks, subject to a maximum tenure of ten (10) years.
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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 twelve (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 twelve (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 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 4years 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.
