The Digest:
In a significant move to fortify Nigeria’s financial system, the Central Bank has introduced stricter succession rules for top bank executives. Domestic Systemically Important Banks must now obtain regulatory approval for new Managing Directors at least six months before the incumbent’s exit, ensuring smoother leadership transitions and reducing sector uncertainty.
Key Points:
- The new directive was issued via a circular from the Director of Financial Policy and Regulation.
- Banks must announce successor MDs publicly at least three months before the current CEO departs.
- The policy targets "too big to fail" banks to prevent instability in the financial system.
- It aligns with Section 2.14 of the 2023 Corporate Governance Guidelines for banks.
- The rule aims to minimize disruption and prepare incoming leaders adequately.
- This brings Nigeria in line with global best practices for banking sector risk management.
- The reform is part of broader efforts by CBN Governor Yemi Cardoso to enhance governance.
Sources: Punch Nigeria
