CBN Directs Banks to Obtain Approval for MD Successors Six Months Ahead

The Central Bank of Nigeria (CBN) has directed all Domestic Systemically Important Banks (DSIBs) to secure regulatory approval for the appointment of successor managing directors at least six months before the exit of incumbent executives.

The apex bank further mandated that such appointments must be publicly announced at least three months prior to the formal departure of the outgoing MD/CEO.

The directive, contained in a circular signed by the CBN’s Director of Financial Policy and Regulation, Rita Sike, is aimed at strengthening corporate governance and reducing uncertainty within Nigeria’s banking sector.

“Each DSIB is hereby required to: (1) obtain regulatory approval for the appointment of a successor MD/CEO no later than six months before the expiration of the incumbent’s tenure, and (2) publicly announce the appointment not later than three months before the planned exit of the incumbent MD/CEO. Strict compliance is expected,” the circular stated.

The CBN explained that the requirement is anchored on Section 2.14 of the 2023 Corporate Governance Guidelines, which obliges boards of commercial, merchant, non-interest, and payment service banks to maintain clear succession plans for top leadership positions.

“This measure is intended to minimise disruptions at the top management level, allow appointees adequate preparation time, and mitigate risks associated with abrupt leadership changes,” the CBN noted.

The apex bank emphasized the critical role of DSIBs in maintaining financial system stability and warned that poorly managed leadership transitions could trigger wider sectoral instability.

The directive follows the recent confirmation of Innocent Ike as the substantive Group Managing Director of Access Holdings Plc, succeeding Roosevelt Ogbonna, in compliance with CBN’s governance rules. Other recent leadership changes in the sector, including the return of Aigboje Aig-Imoukhuede as chairman of Access after the death of Herbert Wigwe, highlight the increasing pace of transitions among Nigeria’s top banks.

With the new directive, banks are now under pressure to ensure orderly leadership transitions and provide clarity to stakeholders well in advance of executive exits.