The Central Bank of Nigeria (CBN) has directed all Domestic Systemically Important Banks (DSIBs) to announce the successors of their managing directors and chief executive officers (MD/CEOs) at least six months before the expiration of the incumbents’ tenure.
The directive was contained in a circular issued on Tuesday by the Director of Financial Policy and Regulation Department, Rita Sike.
The apex bank further mandated that banks must publicly disclose the appointment of successor MD/CEOs at least three months before the outgoing chief vacates office.
According to the CBN, the move is anchored on Section 2.14 of its 2023 Corporate Governance Guidelines, which require commercial, merchant, non-interest, and payment service banks to maintain clear leadership succession plans.
“This requirement seeks to minimise disruptions at the top management level, enable top management appointees to prepare adequately for their new roles, and generally mitigate risks associated with abrupt changes in leadership,” the circular stated.
The CBN stressed that DSIBs, by their size and influence, play a crucial role in maintaining public trust and financial system stability.
“In recognition of the critical role that DSIBs play in sustaining financial system stability, the CBN hereby reiterates the importance of effective succession planning in these institutions,” it added.
By enforcing early approvals and disclosures, the CBN said it hopes to reduce uncertainty among investors and depositors, while aligning local banking practices more closely with global standards.
The new directive followed a series leadership changes in Nigeria’s banking sector. The move is believed to be a ploy to address uncertainty that sometimes come with sudden exits in leadership positions.
The circular stressed: “In recognition of the critical role that DSIBs play in sustaining financial system stability, the CBN hereby reiterates the importance of effective succession planning in these institutions.”
Banks have been instructed to ensure strict compliance with the directive.
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