The Central Bank of Nigeria (CBN) has introduced a new directive requiring all Domestic Systemically Important Banks (DSIBs) to publicly announce the appointment of a new Managing Director/Chief Executive Officer (MD/CEO) at least three months before the departure of the incumbent.
In addition, the apex bank mandated that regulatory approval for the appointment of a successor must be secured no later than six months before the current chief executive’s tenure expires.
According to the CBN, the policy is designed to guarantee seamless leadership transitions, minimise disruptions in bank management, and mitigate risks associated with sudden changes at the top.
“This requirement is aimed at minimising disruptions at the top management level, enabling appointees to adequately prepare for their new roles, and reducing risks tied to abrupt leadership changes,” the regulator said.
The directive was contained in a circular issued to DSIBs and signed by Rita I. Sike, Director of the Financial Policy & Regulation Department of the CBN.
Citing Section 2.14 of the 2023 Corporate Governance Guidelines for Commercial, Merchant, Non-Interest and Payment Service Banks, the circular stressed the importance of robust succession planning. The guidelines require boards of these institutions to approve succession plans for MD/CEOs, Executive Directors (EDs), and senior management personnel.
“In view of the critical role DSIBs play in maintaining financial system stability, the CBN reiterates the importance of effective succession planning in these institutions,” the circular stated.
The apex bank added that DSIBs must (1) secure regulatory approval for a successor MD/CEO no later than six months before the outgoing chief’s tenure lapses and (2) make the appointment public at least three months before the transition.
“You are hereby directed to ensure strict compliance with the above directives,” the CBN warned.
