The Central Bank of Nigeria (CBN) has announced a revision of the tenure limit for executive management and non-executive directors of banks and financial institutions.
According to the review, the executives can only serve a cumulative tenure of 20 years across the banking industry.
In a circular addressed to all deposit money banks, signed by the director of financial policy and regulation department, Chibuzor Efobi, the bank said the review is part of measures aimed at strengthening governance practices in the banking industry.
“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,” the central bank said in the circular, dated 24 February.
“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.”
The bank said that non-executive directors (NEDs), with the exception of independent non-executive directors (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 (three terms of four 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 CBN said.