The Central Bank of Nigeria (CBN) has directed all Domestic Systemically Important Banks (DSIBs) to announce successors to their managing directors and chief executive officers (MD/CEOs) at least six months before the expiration of the incumbent’s tenure.
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The directive, issued on Tuesday in a circular by Rita Sike, Director of the Financial Policy and Regulation Department, aims to strengthen corporate governance and mitigate risks linked to abrupt leadership changes in the banking sector.
Under the new policy, banks must obtain regulatory approval for a successor no later than six months before the MD/CEO’s term ends. The appointment must also be publicly disclosed at least three months prior to the incumbent leaving office.
“This requirement 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 circular stated.
The move is grounded in Section 2.14 of the CBN’s 2023 Corporate Governance Guidelines, which already require commercial, merchant, non-interest, and payment service banks to prepare succession plans for MD/CEOs, executive directors, and other senior management personnel.
Domestic Systemically Important Banks, considered too critical to fail, include some of Nigeria’s largest lenders. The CBN has in recent years intensified oversight of these institutions due to their central role in financial stability and public confidence in the banking system.
The circular emphasised that effective succession planning is essential to sustain financial system stability and avoid governance lapses that have, in the past, caused uncertainty among investors and depositors during sudden leadership changes.
Banks have been instructed to ensure strict compliance with the directive.
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