The Central Bank of Nigeria on Friday, February 24, 2023, revised the regulatory requirements for the tenure limit of Executive and Non-Executive Directors of Deposit Money Banks and Financial Holding Companies.
The CBN stated that the policy was part of measures aimed at strengthening governance practices in the banking industry and is coming 13 years after the Apex Bank limited the tenure of Chief Executive Officers of banks to 10 years.
The disclosure is contained in a circular issued by the CBN’s Director of Financial Policy and Regulation Department, Chibuzo Efobi to all Money Deposit Banks. The circular added that the tenure requirements take effect from 24th February 2023.
In the circular, CBN said that the tenure of Executive Directors (EDs), Deputy Managing Directors (DMD), and Managing Directors (MDs) shall not exceed 10 years.
It also said in a situation 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. Annotation:
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.
Non-Executive Directors (NEDs), with the exception of Independent Non-Executive Directors (INEDs), 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 Executive Directors (EDs), Deputy Managing Directors (DMDs), Managing Directors (MDs), and Non-Executive Directors (NEDs) across the banking Industry is 20 years.
Before you start reading, kindly read our explainer on how to interpret the CBN director.
Who will be affected?
Nairametrics understand that the implementation of the new rule will see the exit of many top bank executives in Nigeria.
Nigeria currently has about 21 commercial banks operating in the country. they include Access Bank Plc, Citibank Nigeria Limited, Coronation Merchant Bank Limited, Ecobank Nigeria Plc, Fidelity Bank Plc, First Bank of Nigeria Limited, and First City Monument Bank Limited.
We also have Guaranty Trust Bank Plc, Heritage Banking Company Limited, Keystone Bank Limited, Providus Bank Limited, and Polaris Bank Limited.
Others include Stanbic IBTC Bank Plc, Standard Chartered Bank Nigeria Limited, Sterling Bank Plc, and Suntrust Bank Nigeria Limited. Making up the final list of banks are Union Bank of Nigeria Plc, United Bank for Africa Plc, Unity Bank Plc, Wema Bank Plc, and Zenith Bank Plc.
Nairametrics compiled a list of the bank executive and non-executive directors that may likely be affected by this latest central bank directive. Some of the people on this list have already resigned following the announcement.
Ladi Balogun (FCMB): In 2000, he was made Executive Director in charge of Strategy and Business Development, and in 2001 he rose to the position of the Banks Deputy Managing Director and was subsequently appointed Managing Director of First City Monument Bank Plc (now First City Monument Bank Limited).
Mr. Balogun, the Group CEO, of FCMB Group Plc, is affected by the new rules, having served as the bank’s CEO for 10 years; from 2007 to 2017, before his appointment as the Group Chief Executive of FCMB Group Plc in 2017. Having been a top executive for over 20 years he is likely to relinquish his present position in compliance with the new CBN guidelines.
Gbenga Francis Shobo (FBN): Our checks revealed that Gbenga Francis Shobo, DMD at First Bank would be affected by the new guidelines. Shobo joined the Board of First Bank in 2012 and in compliance with the revised rule has stepped down from the company board.
Segun Agbaje (GTCO): Mr.Agbaje is currently the Group Chief Executive Officer of GTCO. He rose through the ranks to become an Executive Director in January 2000, Deputy Managing Director in August 2002. In 2011, he was appointed Managing Director and CEO of GTBank. Cumulatively, he has spent over two decades surpassing the CBN’s revised cumulatively tenor of 20 years across the banking industry.
Akinola George-Taylor (GTCO): George-Taylor has been on Board positions for over 2 decades. He started his banking career in 1993 with GTBank, where he rose to the position of Executive Director in charge of Public Sector Group, Abuja, and North Central. He was also Managing Director of GTBank in Sierra Leone between 2005 and 2009.
Abubakar Suleiman (Sterling Bank): Also affected by the new guidelines is Abubakar Suleiman, MD/CEO, of Sterling Bank. Abubakar joined Sterling Bank as Group Treasurer in 2003 from Citibank and proceeded to become ED in 2013 before he was appointed CEO in April 2018.
Tony Elumelu (UBA): The new guidelines would also oust Tony Elumelu as Chairman, of United Bank for Africa. He has led the bank since 2005, following the merger with Standard Trust Bank in 2005. Our inclusion of Mr. Elumelu on this list is because he has been on the board of a bank for over 20 years cumulatively.
Caroline Anyanwu (UBA): Caroline, currently on the Board of UBA as a Non-Executive member is also affected by the new guidelines. She has been on Boards of Banks both as an Executive Director and a Non-Executive Director since 2009.
Nneka Onyeali-Ikpe (Fidelity Bank): The Managing Director/CEO of Fidelity Bank, Ms. Nneka Onyeali-Ikpe, is also affected by the new guidelines and is expected to relinquish her dignified position. Onyeali-Ikpe has been on Boards of Banks for 12 years. In 2011, she joined Enterprise Bank as an ED, before joining Fidelity Bank as an ED in 2015.
Herbert Wigwe (AccessCorp): Mr.Wigwe has been on the Boards of Banks for over 3 decades. After over 10 years of service, Wigwe left GTbank as an ED to co-lead the transformation of Access Bank Plc in March 2002 as DMD. He became the Group Managing Director/CEO of Access Bank in 2014 and served in that capacity till May 2022. While Access Bank has since transitioned to a holding company there is confusion as to whether he is affected by the CBN directive. However, we retain him on this list as he has been a director of a bank for over 20 years.
Jim Ovia (Zenith Bank): Jim James Ovia has surpassed the cumulative tenure of 20 years thus we believe he is also affected. Mr. Ovia founded Zenith Bank in 1990 and retired from the bank in 2010 following a similar CBN policy which limited the term of banks’ Chief Executive Officers (CEOs) to a maximum of 10 years. However, he was later appointed as board Chairman and Non-Executive Director of the bank in 2014, a position he is holding currently.
Dame (Dr.) Adaora Umeoji (Zenith Bank): The DMB, unfortunately, has to relinquish her position based on the CBN’s new rules having spent over 10 years on Boards of Banks. Dr. Umeoji has been the DMD, Executive Director at Zenith Bank since 2012.