CBN Gives New Order to UBA, Access, Zenith, FBN, GTBank on Leadership Changes
- CBN has issued a new directives to the big banks on the need to secure approval for MD successors within six months before incumbents’ exit
- It also stated that banks must publicly announce new MD appointments at least three months before outgoing chief executives step down
- The directive from the apex bank aims to strengthen corporate governance and reduce leadership gap
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Legit.ng journalist Dave Ibemere has over a decade of experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
The Central Bank of Nigeria (CBN) has directed Domestic Systemically Important Banks (DSIBs) to secure approval for successor Managing Directors/CEOs at least six months before the current ones leave.
The banks must also make the appointments public at least three months before the outgoing MD/CEOs officially leave office.
Source: Facebook
CBN strict order on leadership changes
The directive was released via a circular signed by Dr. Rita Sike, Director of Financial Policy and Regulation, and posted on the CBN website on Tuesday, September 16.
The directive aims to strengthen corporate governance and ensure smoother leadership transitions in banks deemed critical to Nigeria’s financial system.
DSIB includes First Bank, UBA, GTB, Access, and Zenith.
The circular from CBN reads:
"Section 2.14 of the Central Bank of Nigeria (CBN) Corporate Governance Guidelines for Commercial, Merchant, Non-interest, and Payment Service Banks in Nigeria, 2023, requires boards of commercial, merchant, non-interest, and payment service banks to approve succession plans for their Managing Directors/Chief Executive Officers (MD/CEO), other EDs and senior management staff.
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.
Source: UGC
It added that the rules align Nigeria’s banking oversight with international best practices in corporate governance, Punch reports.
"In recognition of the critical role that Domestic Systemically Important Banks (DSIBS) play in sustaining financial system stability, the CBN hereby reiterates the importance of effective succession planning in these institutions. Consequently, and in line with good corporate governance practice, each DSIB is hereby required to:
1. Ensure it obtains regulatory approval for the appointment of a successor Managing Director (MD/CEO) not later than six months to the expiration of the tenor of the incumbent MD/CEO.
2. 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."
Banks leadership changes
The directive comes after a series of high-profile leadership changes in the sector.
Access Holdings Plc recently confirmed Innocent Ike as its group managing director following CBN approval, succeeding Roosevelt Ogbonna, who stepped down in compliance with governance rules.
The return of former CEO Aigboje Aig-Imoukhuede as Access chairman after the sudden death of Herbert Wigwe last year underscored the urgency of clear succession planning.
Zenith Bank Appoints First Female Gmd/CEO Adaora Umeoji
Earlier, Legit.ng reported that Zenith Bank, one of Nigeria's leading financial institutions, has announced the appointment of Adaora Umeoji as the new Group Managing Director/Chief Executive.
The announcement was made in a statement released by the bank to the Nigerian Exchange Limited (NGX).
Over the years, Umeoji has made significant contributions to the growth of the financial industry in Nigeria and Africa
Source: Legit.ng
