The Central Bank of Nigeria (CBN) has reviewed the tenure limit for bank executive and non-executive directors.
The CBN disclosed this in a circular dated Friday, February 24, 2023, and signed by Chibuzo Efobi, the Director, the Financial Policy and Regulation Department of the Apex Bank.
In the circular, the CBN stated that the review was meant to strengthen governance practices in the banking sector.
The circular read: “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.
“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 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.”
The CBN also announced that the circular takes effect from 24th February 2023.