The Central Bank of Nigeria has revised the regulatory requirements for the tenure of executive management and non-executive directors of Deposit Money Banks and Financial Holding Companies in the Code Of Corporate Governance For Banks And Discount Houses (Ref: FPR/DIR/CIR/GEN/01/004).
In a circular titled ‘Review of tenure of executive management and non-executive directors of Deposit Money Banks in Nigeria’, on Friday, the central bank’s Director, Financial Policy and Regulation Department, CBN, Chibuzor Efobi, said the development was part of measures aimed at strengthening governance practices in the banking industry.
The circular, which was issued to all DMBs, added that the tenure requirements will apply effective from the date of the circular.
According to the circular, “The tenure of executive directors, deputy managing directors and managing directors shall be in accordance with the terms of their engagement approved by the board of directors of banks, subject to a maximum tenure of 10 years.
“Where an executive who is a DMD becomes the MD/CEO of a bank or any other DMB before the end of his/her maximum tenure, the cumulative tenure of such executive shall not exceed 12 years.
“However, for an ED who becomes a DMD of a bank or any other DMB, his/her cumulative tenure as ED and DMD shall not exceed 10 years”
The circular added that “Non-executive directors with the exception of independent non-executive directors shall serve for a maximum period of 13 years in a bank, broken into three terms of four years each.
“EDs, DMDs and MDs who exit from the board of a bank either upon or prior to the expiration of his/her maximum tenure, shall serve out a cooling off period of one year before being eligible for appointment as NED to the board of directors.
“NEDs who exit from the board of a bank either upon or prior to the expiration of his/her maximum tenure of 12 years (Three terms of four years each), shall serve out a cooling off period of one year before being eligible for appointment to the board of directors of any other DMB.”
The circular said the tenure limit of EDs/DMDs, MDs and NEDs across the banking industry is 20 years.