The Central Bank of Nigeria (CBN) has issued a new code of corporate governance for banks and other financial institutions, limiting the tenure of their chief executive officers (CEOs) to a maximum of 12 years.
The code, which was contained in a 96-page circular posted on the CBN website over the weekend, also stipulated that only one member of an extended family can occupy the position of CEO, managing director (MD), chairman or executive director (ED) at any given time.
The circular, signed by Chibuzo Efobi, the director of financial policy and regulation department, stated that the code was aimed at enhancing accountability, transparency and ethical standards in the banking sector.
The code also specified that the board of directors of each bank shall approve a succession plan for the CEO, other EDs and senior management staff, which shall be reviewed at least once every two years.
The CBN said the code would take effect from August 1, 2023, and urged all banks and other financial institutions to comply with its provisions.
The code is a revision of the previous one issued in 2014, which allowed bank executives to serve a cumulative tenure of 20 years across the banking sector. The CBN said the revision was necessitated by the changing dynamics and developments in the sector.
