CBN revises Tenure of Directors of Banks in Nigeria

The Central Bank of Nigeria (CBN0 has revised the tenures of Executive Management and Non-executive Directors of Deposit Money Banks in Nigeria.

In a circular released by the apex bank, the cumulative tenure limit of Executive Directors, Deputy Managing Directors and Managing Directors of Deposit Money Banks and Financial Holding Companies across the banking industry shall be 20 years.

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The regulatory stated that the revision of the regulatory requirements for these financial institutions was a part of measures aimed at strengthening governance practices in the banking industry.

The circular on the Code of Corporate Governance for Banks and Discount Houses seen by Investogist, stated that the following tenure requirements shall apply effective from 24th February, 2024:

The tenure of Executive Directors (ED), Deputy Managing Directors (DMD) and Managing Directors (MD) 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.
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 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 Directors (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 4 years 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.
The cumulative tenure limit of EDs/DMDs, MDs and NEDs across the banking industry is 20 years.

Sanusi Lamido Sanusi, had introduced the Good Corporate Governance policy stipulating 10 years only as the maximum tenure for bank Managing Directors (MDs) during his tenure as the governor of the Central Bank of Nigeria.