CBN Orders Banks to Secure MD/CEO Successor Approval Six Months Ahead to Strengthen Governance
The Central Bank of Nigeria (CBN) has issued a new directive compelling Domestic Systemically Important Banks (DSIBs) to secure regulatory approval for the appointment of successor Managing Directors/Chief Executive Officers (MD/CEOs) at least six months before the current officeholder’s tenure expires. The policy, announced in a circular signed by Dr. Rita Sike, Director of the Financial Policy and Regulation Department, is designed to strengthen corporate governance and prevent leadership gaps that could destabilize Nigeria’s banking system.
Under the directive, DSIBs must also publicly announce the appointment of a new MD/CEO no later than three months before the outgoing executive leaves office. This rule, which takes immediate effect, builds on Section 2.14 of the CBN’s 2023 Corporate Governance Guidelines for commercial, merchant, non-interest, and payment service banks, which emphasize proactive succession planning for top management roles.
According to the CBN, DSIBs—often described as “too big to fail” because of their size and interconnectedness—play a critical role in maintaining stability within Nigeria’s financial system. Abrupt leadership changes at such institutions, the apex bank warned, could create ripple effects across the broader economy. “This requirement seeks to minimize disruptions at the top management level, enable appointees to prepare adequately for their new roles, and mitigate risks associated with abrupt changes in leadership,” the circular stated.
The move reflects the CBN’s determination to align Nigeria’s banking sector with international best practices. Early regulatory approvals and public disclosures, the bank noted, will help avert uncertainties and reassure customers, investors, and regulators of the sector’s resilience. The directive also underscores the importance of leadership continuity, particularly at a time when several high-profile Nigerian banks have undergone major executive changes.
This policy was issued just weeks after Access Holdings Plc secured regulatory approval to appoint Mr. Innocent Ike as its Group Managing Director/CEO following the resignation of Roosevelt Ogbonna. The appointment, which came under the chairmanship of Aigboje Aig-Imoukhuede, highlights a wave of leadership transitions across Nigeria’s banking industry as institutions comply with the CBN’s strengthened corporate governance framework.
source: nairametrics