The Central Bank of Nigeria (CBN) has reveiwed the tenure limit for all Executive Management and Non-Executive Directors of banks and financial institutions.
This was contained in a circular recently sent to all banks, titled: “Review of Tenure of Executive Management and Non-Executive Directors of Deposit Money Banks in Nigeria.”
According to the circular, the new tenure guidelines is expected to take effect from effective from the 24th of February, 2023 to specify the tenure of its Managing Directors, Deputy Managing Directors, and Executive Directors adding that the MDs, DMDs and EDs shall be in accordance with the terms of their engagement.
However, the Board of Directors of banks are also expected to be subject to the limit of the officials to maximum tenure of 10 years.
CBN order said, “Where an Executive who is a DMD becomes the MD/CEO before the end of his/her maximum tenure, the cumulative tenure of such Executive shall not exceed 12 years.
In the case where an ED becomes a DMD, his/her cumulative tenure as ED and DMD shall not exceed 10 years.
While Non-EDs, with the exception of Independent Non-Executive Directors (INED), shall serve for a maximum period of 12 years, broken into three terms of four years each.”
To this end, EDs, DMDs and MDs who exit from the board either upon or prior to the expiration of his/her maximum tenure, shall serve out a cooling-off period of 1 year before appointment as a NED.
NEDs, who exit the bank either upon or prior to the expiration of his/her maximum tenure of 12 years (3 terms of 4 years each), shall serve out “a cooling-off period of 1 year before being eligible for appointment to the board”.
Finally, that the cumulative tenure limit of EDs/DMDs, MDs and NEDs across the banking industry is 20 years, CBN concluded.