The Central Bank of Nigeria has reviewed the tenure of Nigerian banks’ Executive Management and Non-Executive Directors, a move it believes will strengthen their corporate governance structure.
In the revised edition for bank corporate governance released on Friday, the apex bank stated that the cumulative tenure limit for Executive Directors, Deputy Managing Directors, Managing Directors, and Non-Executive Directors across the banking industry shall not exceed 20 years.
The CBN made the announcement in a circular addressed to the country’s deposit money banks with the reference number FPR/DIR/PUB/CIR/001/070.
The development is coming 13 years after the bank limited the tenure of Chief Executive Officers of banks to 10 years.
In the fresh development, CBN said Executive Directors, Managing Directors, and Deputy Managing Directors will not exceed ten years.
It said in a situation where an executive who is a Deputy Managing Director becomes the MD or CEO, the individual is entitled to a cumulative tenure not exceeding 12 years.
The CBN also provided that an executive who becomes a Deputy Managing Director of a bank or any DMB will enjoy a cumulative tenure as ED and DMD of 10 years.
The CBN noted, “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.”