The Central Bank of Nigeria (CBN) has announced a tenure limit for Executive Management and Non-Executive Directors of banks and financial institutions.
The directive takes effect from February 24, 2023.
The new guidelines specify the tenure of Managing Directors, Deputy Managing Directors, and Executive Directors.
A circular on Friday said the tenure of the MDs, DMDs and EDs shall be in accordance with the terms of their engagement.
Henceforth, the Board of Directors of banks are expected to be subject to the limit of the officials to maximum tenure of 10 years.
“Where an Executive who is a DMD becomes the MD/CEO before the end of his/her maximum tenure, the cumulative tenure of such Executive shall not exceed 12 years,” CBN ordered.
In the case where an ED becomes a DMD, his/her cumulative tenure as ED and DMD shall not exceed 10 years.
Also, non-EDs, with the exception of Independent Non-Executive Directors (INED), shall serve for a maximum period of 12 years, broken into three terms of four years each.
Furthermore, EDs, DMDs and MDs who exit from the board either upon or prior to the expiration of his/her maximum tenure, shall serve out a cooling-off period of 1 year before appointment as a NED.
NEDs who exits the 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”.
The CBN added that the cumulative tenure limit of EDs/DMDs, MDs and NEDs across the banking industry is 20 years.
