The Central Bank of Nigeria (CBN) has announced term limits for executive management and non-executive directors of banks and financial institutions.
The directive is effective as of February 24, 2023.
The new guidelines define the terms of office of managing directors, deputy directors, and executive directors.
A circular issued on Friday said that the term of office of CEOs, DMDs and EDs should be in accordance with the terms of their participation.
From now on, the board of directors of banks is expected to be subject to a maximum term of 10 years.
“Where an Executive Director who is a DMD becomes the Managing Director/Chief Executive Officer before the end of his maximum term of office, the cumulative term of such Executive Director shall not exceed 12 years,” the Central Bank of Nigeria ordered.
In the event that the ED turns into a DMD, his cumulative duration as both ED and DMD shall not exceed 10 years.
Also, non-executive directors, with the exception of independent non-executive directors (INED), must serve for a maximum of 12 years, divided into three terms of four years each.
Furthermore, executive directors, DMDs, and MDs who exit the board either at or before the expiration of its maximum term must serve a one-year cooling-off period prior to appointment as an NED.
NEDs who exit the Bank either at or before the expiration of its maximum term of 12 years (3 terms every 4 years), must serve a “one-year cooling-off period before they are eligible for appointment to the Board”.
The Bank of Canada added that the cumulative holding limit for EDs/DMDs, MDs and NEDs across the banking industry is 20 years.
CBN announces maximum length of service for bank MDs, DMDs, and EDs
