CBN Extends Tenure of Bank CEOs to 12 Years

By Adedapo Adesanya

The Central Bank of Nigeria (CBN) has extended the tenure of Chief Executive Officers (CEOs) of commercial banks in the country by two years.

This was announced in a circular signed by Mr Chibuzo Efobi.

Before now, chief executives of financial institutions were allowed to remain in office for a maximum of 10 years, but to strengthen management and corporate governance among lenders, the apex bank, according to powers on it by the Central Bank of Nigeria (CBN) Act 2007 and the Banks and Other Financial Institutions Act 2020, extended the reigns of the CEOs by two, noting that this will take effect from August 1.

The CBN said it adopted relevant principles and recommended practices of the Nigerian Code of Corporate Governance issued by the Financial Reporting Council in 2018, global corporate governance practices as well as other related governance codes.

“Banks and financial holding companies are invited to note the responsibilities imposed on their boards by these guidelines, and especially on the Executive Compliance Officers (where applicable),” the statement noted.

The new rules are slightly more relaxed than a previous review made in February, which also counted how long executive directors had been in office before being promoted to the position of CEO.

However, henceforth those previous years won’t be included in the 12-year maximum.

Read the statement below:

In the exercise of powers conferred by the Central Bank of Nigeria (CBN) Act 2007 and the Banks and Other Financial Institutions Act 2020, the Central Bank of Nigeria (CBN) hereby issues the Corporate Governance Guidelines for Commercial, Merchant, Non-Interest, and Payment Services Banks in Nigeria; and the Corporate Governance Guidelines for Financial Holding Companies in Nigeria.

In developing these Guidelines, the CBN adapted relevant principles and recommended practices of the Nigerian Code of Corporate Governance issued by the Financial Reporting Council in 2018, global corporate governance practices as well as other related governance codes, circulars and directives made by the CBN.

Banks and financial holding companies are invited to note the responsibilities imposed on their boards by these guidelines, especially on the Executive Compliance Officers (where applicable).

These guidelines supersede all previous codes, circulars and related directives on corporate governance issued by the CBN.

The effective date of these Guidelines is August 1, 2023.