Nigeria’s major banks must get approval for new managing directors at least six months before their current chief executives leave office, the Central Bank of Nigeria has ordered.
The apex bank also said these appointments must be announced publicly no later than three months before the outgoing managing director officially steps down.
The new rules apply to Domestic Systemically Important Banks (DSIBs) – the largest lenders that are considered “too big to fail” because of their size and importance to Nigeria’s financial system.
The directive was contained in a circular signed by Dr Rita Sike, Director of Financial Policy and Regulation, and published on the CBN’s website on Tuesday.
“Consequently, and in line with good corporate governance practice, each DSIB is hereby required to: ensure it obtains regulatory approval for the appointment of a successor Managing Director not later than six months to the expiration of the tenor of the incumbent MD/CEO,” the circular stated.
Banks must also “publicly announce the appointment of the successor MD/CEO not later than three months to the planned exit of the incumbent MD/CEO.”
Preventing financial system disruption
The CBN said the move is part of broader efforts to strengthen corporate governance and maintain confidence in the financial system. It warned that leadership uncertainty at large banks could destabilise the entire financial sector and damage the wider economy.
The new rule draws from corporate governance guidelines issued in 2023, which require commercial, merchant, non-interest, and payment service banks to maintain strong succession plans for senior executives.
The policy “seeks to minimise disruptions at the top management level, enable top management appointees to prepare adequately for their new roles, and generally mitigate risks associated with abrupt changes in leadership,” the central bank said.
DSIBs play an outsized role in Nigeria’s financial system because of their scale, complexity, and connections with other institutions. A shock at one of these banks could ripple across financial markets, affecting depositors, shareholders, and the broader economy.
By tightening succession rules, the CBN aims to ensure smoother leadership transitions and stronger institutional resilience. The policy also aligns Nigeria more closely with international best practice, where regulators emphasise succession planning as a critical element of risk management.
Recent leadership changes highlight the need for planning
The new directive follows several high-profile leadership changes in Nigeria’s banking sector. Access Holdings recently confirmed Innocent Ike as its managing director after securing regulatory approval, following Roosevelt Ogbonna’s exit in line with governance rules.
The return of Aigboje Aig-Imoukhuede as chairman of Access Holdings after the tragic death of former CEO Herbert Wigwe in 2024 highlighted the importance of structured succession planning.
Under the new rules, DSIBs must begin succession planning well in advance, secure CBN approval six months before a handover, and make public announcements three months ahead. The timeline gives stakeholders – including investors, customers, staff, and regulators – greater clarity about leadership continuity.
Analysts say the measure is intended to reassure markets in an economy often hit by shocks such as currency volatility, high inflation, and rising interest rates. It could also reduce speculation and rumours over executive exits, which have previously disrupted confidence and unsettled investors.
The directive fits with the broader reform agenda of CBN Governor Olayemi Cardoso, who has prioritised transparency, governance, and resilience in the financial sector. The apex bank has introduced foreign exchange reforms, tightened recapitalisation requirements, and rolled out other policies to stabilise the industry.
