The Central Bank of Nigeria (CBN) has revised the regulatory requirements for the tenure of executive management and non-executive directors of Deposit Money Banks (DMBs) and Financial Holding Companies.
In a circular posted on its website on Friday, the apex bank
said the move was part of measures aimed at strengthening governance practices
in the banking industry.
According to the circular, which was signed by the Director
of the Financial Policy and Regulation Department at the CBN, Mr Chibuzo Efobi,
and took effect yesterday, the tenure of Executive Directors (EDs), Deputy
Managing Director (DMDs) and Managing Directors (MDs), “shall be in accordance
with the terms of their engagement approved by the Board of Directors of banks,
subject to a maximum tenure of ten years.”
It also stated that, where an Executive Director, 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
twelve years.”
However, the circular said that 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.”
Furthermore, it announced that Non-Executive Directors (NEDs),
with the exception of Independent Non-Executive Directors (INED), “shall serve
for a maximum period of twelve years in a bank, broken into three terms of four
years each.”
In addition, the circular said that EDs, DMDs and MDs, who
exit from the board of a bank either before or at the expiration of his/her
maximum tenure, “shall serve out a cooling-off period of 1 year before being
eligible for appointment as a NED to the Board of Directors.”
Similarly, it stated that NEDs who exit from the board
of a bank, either before or at 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 of Directors of
any other DMB.”
According to the circular: “The cumulative tenure limit of
EDs/DMDs, MDs and NEDs across the banking industry is 20 years.”
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