CBN orders banks to secure approval for MD/CEOs’ successors six months before exit

The Central Bank of Nigeria (CBN) has directed each Domestic Systemically Important Banks (DSIBs) to denote the successors of their managing directors and main enforcement officers (MD/CEOs) astatine slightest six months earlier the expiration of the incumbents’ tenure.

The directive was contained successful a circular issued connected Tuesday by the Director of Financial Policy and Regulation Department, Rita Sike.

The apex slope further mandated that banks indispensable publically disclose the assignment of successor MD/CEOs astatine slightest 3 months earlier the outgoing main vacates office.

According to the CBN, the determination is anchored connected Section 2.14 of its 2023 Corporate Governance Guidelines, which necessitate commercial, merchant, non-interest, and outgo work banks to support wide enactment succession plans.

“This request seeks to minimise disruptions astatine the apical absorption level, alteration apical absorption appointees to hole adequately for their caller roles, and mostly mitigate risks associated with abrupt changes successful leadership,” the circular stated.

The CBN stressed that DSIBs, by their size and influence, play a important relation successful maintaining nationalist spot and fiscal strategy stability. 

“In designation of the captious relation that DSIBs play successful sustaining fiscal strategy stability, the CBN hereby reiterates the value of effectual succession readying successful these institutions,” it added.

By enforcing aboriginal approvals and disclosures, the CBN said it hopes to trim uncertainty among investors and depositors, portion aligning section banking practices much intimately with planetary standards.

The caller directive followed a bid enactment changes successful Nigeria’s banking sector. The determination is believed to beryllium a ploy to code uncertainty that sometimes travel with abrupt exits successful enactment positions. 

The circular stressed: “In designation of the captious relation that DSIBs play successful sustaining fiscal strategy stability, the CBN hereby reiterates the value of effectual succession readying successful these institutions.”

Banks person been instructed to guarantee strict compliance with the directive.

Vanguard News

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