The Central Bank of Nigeria has issued a fresh directive compelling all Domestic Systemically Important Banks to obtain regulatory approval for the appointment of successor managing directors at least six months before the exit of incumbent chief executives.
In a circular signed by the Director of Financial Policy and Regulation, Dr Rita Sike, the apex bank ordered that such appointments must be made public no later than three months before the outgoing CEO officially vacates office. The policy shift is part of broader efforts to strengthen corporate governance, reduce uncertainty, and preserve confidence in Nigeria’s financial system.
The circular stated: “Consequently, and in line with good corporate governance practice, each DSIB is hereby required to: Ensure it obtains regulatory approval for the appointment of a successor Managing Director not later than six months to the expiration of the tenor of the incumbent MD/CEO. Publicly announce the appointment of the successor MD/CEO not later than three months to the planned exit of the incumbent MD/CEO. Please ensure strict compliance.”
The CBN stressed that leadership uncertainty at large banks could destabilise the financial sector and, by extension, the wider economy. The new rule “seeks to minimise disruptions at the top management level, enable top management appointees to prepare adequately for their new roles, and generally mitigate risks associated with abrupt changes in leadership.”
The directive is anchored in Section 2.14 of the Corporate Governance Guidelines issued in 2023, which requires the boards of commercial, merchant, non-interest, and payment service banks to maintain robust succession plans for their most senior executives.
Domestic Systemically Important Banks, often referred to as “too big to fail” institutions, play a crucial role in the financial system because of their size, complexity, and interconnectedness. The CBN explained that the directive brings Nigeria closer in line with international best practices, where regulators emphasise succession planning as a critical element of risk management in the banking industry.
The new directive comes on the heels of several high-profile leadership changes in Nigeria’s banking sector, including the recent confirmation of Innocent Ike as Access Holdings Plc’s substantive Group Managing Director after receiving CBN’s regulatory approval.
With the new directive, DSIBs now face tighter timelines and regulatory scrutiny over leadership changes. Banks must begin succession planning earlier in a CEO’s tenure, secure CBN approval six months ahead of the incumbent’s exit, and announce successors publicly three months before the handover date.
The directive is consistent with the broader reform agenda of the CBN under Governor Olayemi Cardoso, who has prioritised strengthening governance, transparency, and resilience in the financial sector. Succession planning now joins that list as a critical plank of reform, reinforcing the message that Nigeria’s financial institutions must be run with the highest governance standards.
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