Banks must get CEO succession approval 6 months before incumbent exits — CBN

Announce replacements 3 months ahead

The Central Bank of Nigeria (CBN) has directed Domestic Systemically Important Banks (DSIBs) to strengthen succession planning by securing approval for the appointment of new chief executives six months before the exit of incumbents.

The measure, contained in a circular signed by the Director of Financial Policy and Regulation, Rita Sike, and released on Tuesday, also requires banks to publicly disclose the appointment of successor managing directors or chief executive officers at least three months before the outgoing chief leaves office.

The apex bank explained that the directive is rooted in Section 2.14 of its 2023 Corporate Governance Guidelines, which mandate commercial, merchant, non-interest, and payment service banks to maintain clear succession strategies for their leadership teams.
“This requirement 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 circular stated.
According to the CBN, DSIBs play a pivotal role in sustaining public confidence and financial system stability, and could pose wider risks if leadership transitions are not carefully managed.
“In recognition of the critical role that DSIBs play in sustaining financial system stability, the CBN hereby reiterates the importance of effective succession planning in these institutions,” it said.

The new directive follows a series of leadership changes in Nigeria’s banking sector. Access Holdings Plc recently confirmed Innocent Ike as group managing director after regulatory approval, succeeding Roosevelt Ogbonna, whose exit complied with corporate governance rules introduced by the CBN. The earlier departure of long-serving director Seyi Kumapayi, as well as the return of Aigboje Aig-Imoukhuede as chairman after the death of Herbert Wigwe, underscored the scale of transitions within the group.

By requiring early approvals and public announcements, the CBN said it aims to reduce uncertainty among investors and depositors, while bringing local practices closer to international standards.

Banks have been instructed to ensure strict compliance with the directive.