CBN Orders Banks to Seek Approval for MD Successors Six Months Ahead

The Central Bank of Nigeria has directed all Domestic Systemically Important Banks to obtain its approval for the appointment of successor managing directors six months before the exit of incumbents. The banks must also make the appointment public at least three months before the outgoing chief executive leaves office.

The directive, contained in a circular signed by the Director of Financial Policy and Regulation, Rita Sike, is intended to strengthen corporate governance and reduce uncertainty in the financial sector. The CBN said the rules apply to commercial, merchant, non-interest, and payment service banks.

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According to the circular, the requirement stems from the 2023 Corporate Governance Guidelines, which make it mandatory for boards to maintain succession plans for top leadership positions. The apex bank said the measure would minimise disruptions, allow adequate preparation, and reduce risks associated with abrupt leadership changes.

The CBN added that Domestic Systemically Important Banks play a critical role in the economy and could trigger wider instability if transitions are not properly managed. It said the new rules align Nigeria with international best practice.