From Uche Usim, Abuja
In a move towards strengthening governance practices in the banking industry, the Central Bank of Nigeria (CBN), on Friday, reviewed the tenures of Managing Directors, Deputy Managing Directors (DMDs) and Executive Directors of Deposit Money Banks (DMBs) and other financial institutions.
In a circular dated February 25 and signed by Chibuzo Efobi, Director, Financial Policy and Regulation Department, the new guidelines specify the tenure of Managing Directors, Deputy Managing Directors as well as Executive Directors.
“The tenure of Executive Directors (EDs), Deputy Managing Directors (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 10 years.
“Where an Executive 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 12 years.
“However, for an Executive (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”, the circular noted.
The apex bank also stated that Non-Executive Directors (NEDS), with the exception of Independent Non- Executive Director (INED), shall serve for a maximum period of 12 years in a bank, broken into three terms of four years each.
“NEDs who exit from the Board of a bank either upon or prior to the expiration of his/her maximum tenure of 12 years; three terms of four years each, shall serve out a cooling-off period of one year before being eligible for appointment to the Board of Directors of any other DMB.
“The cumulative tenure limit of EDS/DMDs, MDS and NEDs across the banking Industry is 20 years”, the statement added.