The Central Bank of Nigeria has revised the tenure of executive directors (ED). Deputy managing directors (DMD), and managing directors (MDs) of Banks and Bank Holding companies.
According to the approved guidelines seen by Nairametrics, the cumulative tenure limit of directors (ED, DMD, MD, and NEDs) on the Board of the same bank is twenty-four (24) years. It was 20 years in the previous regulation.
This is contained in section 3 of the new Corporate Governance Guidelines for Commercial, Merchant, Non-Interest, and Payment Service Banks in Nigeria.
The current guidelines which were issued as a circular take effect August 1, 2023.
Executive Directors: According to Section 3 of the guidelines the tenure of the MD/CEO of a bank shall be in accordance with the terms of engagement with the bank but subject to a maximum period of twelve (12) years.
The guidelines also provide for the tenure of the Deputy Managing Director (DMD) and Executive Director (ED).
It also stated that the tenure of a DMD/ED of a bank shall not exceed a period of twelve (12) years.
However, where an ED becomes a DMD, a cumulative tenure of twelve (12) years applies and shall not be extended.
This means, if an ED who has served for 5 years is made DMD, they only have 7 years left to serve as DMD.
But where a DMD/ED becomes an MD/CEO of the same bank, his/her previous tenure as DMD/ED is not included in computing his/her tenure as MD/CEO.
It, however, stated that this is subject to a cumulative tenure limit of 24 years which was covered in Section 8 of the Guidelines.
Section 8 states that the cumulative tenure limit of directors (ED, DMD, MD, and NEDs) on the Board of the same bank is twenty-four (24) years.
The new guidelines for tenures MDs, DMD, and ED of banks is a change from a recent review conducted on February 24, 2023, under Godwin Emefiele. In that guideline, the tenure of ED, DMD, and MD was subject to a maximum of 10 years.