The Central Bank of Nigeria has reviewed the tenure of directors including managing directors of banks in the country, putting the cumulative tenure for executive directors, deputy managing directors and managing directors across the banking industry at a maximum of 20 years.
With the reviewed tenure no bank executive, is expected to have surpassed 20 years across the banking industry from the time of appointment as executive or non-executive director to deputy managing director and managing director.
This was contained in a circular dated February 24, 2023 to all deposit money banks by the apex bank and signed by the Director, Financial Policy and regulation department, Chibuzo Efobi. According to the circular, titled “Review of Tenure of Executive Management and Non-Executive Directors of Deposit Money Banks in Nigeria”, the revised regulatory requirements for the tenure of Executive Management and Non-executive Directors of DMBs and Financial Holding Companies in the Code of Corporate Governance for Banks and Discount Houses is part of measures aimed at strengthening governance practices in the banking industry.
In 2010, the apex bank had issued the first guideline on tenures for bank executives, limiting tenures of chief executives of banks to 10 years, effectively sacking bank MDs whose tenure elapsed the 10 year stipulation as at July 31, 2010.
Thirteen years after, the apex bank is extending the tenure to executive directors, non-executive directors as well as deputy managing directors. The latest circular stipulates that the tenure of Eds, DMDs and 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 10 years.
“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 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.
“Non-Executive Directors (NEDs), with the exception of Independent Non-Executive Director (INED), shall serve for a maximum period of 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 one 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 one year before being eligible for appointment to the Board of Directors of any other DMB. The cumulative tenure limit of EDs/DMDs, MDs and NEDs across the banking industry is 20 years.”
The reviewed tenure will impact the position of the Managing Director of Access Corporation, Herbert Wigwe as well as the Managing Director of Guaranty Trust Holding Company. Both financial institutions had become holding companies in 2022 and 2021 respectively.
Leadership findings revealed that Access Corporation’s Wigwe has a cumulative of 25 years as he had been appointed Executive Director in Guaranty Trust Bank in 1998 before he bought Access Bank in collaboration with Aig Imokuede. Similarly, Agbaje was appointed Executive Director in GTBank in 2000 bringing his cumulative years to 23 years
