February 25, (THEWILL) – New guidelines issued by the Central Bank of Nigeria (CBN) on the tenure of Executive Management and Non-Executive Directors of banks and financial institutions have sent some top bank executives on immediate retirement.
The guidelines, contained in a circular entitled “Review of Tenure of Executive Management and Non-Executive Directors of Deposit Money Banks in Nigeria” dated February 24, 2023, specified the tenure of Managing Directors (MDs), Deputy Managing Directors (DMDs), Executive Directors (EDs) and Non-Executive Directors (EDs) of banks and financial institutions.
Checks by THEWILL revealed that many prominent bank executives and non-executive board members are caught up in the web of the sudden regulatory guidelines set to trigger a ‘Tsunami’ in the financial services sector.
The guidelines, among other conditions, stipulate that 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 the banks, subject to a maximum tenure of ten (10) years.
The guidelines further states that 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 twelve (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 apex bank stated in the circular.
THEWILL findings revealed that the current DMD of First Bank, Francis Gbenga Shobo, who joined the Board in 2012 is affected by the new guidelines and expected to proceed on immediate retirement.
Prior to his appointment as DMD, Shobo was the ED overseeing the Retail Banking/Public Sector businesses in the Lagos and West Directorate of the old generation bank.
Before then, he was the ED overseeing the retail business in the South Directorate.
By the new CBN guidelines, Mr Shobo has served in the executive management for 12 years – two years beyond the stipulated 10-year tenure.
Also expected to proceed on immediate retirement is Ms Adaora Remy Umeoji, DMD, Zenith Bank. Ms Umeoji was appointed ED in December 2012.
By the new CBN guidelines, Ms Umeoji has exceeded the stipulated 10-year tenure and is expected to proceed on immediate retirement.
The Managing Director/CEO, Fidelity Bank, Ms Nneka Onyeali-Ikpe is also affected by the new guidelines.
Prior to her career in Fidelity Bank, Onyeali-Ikpe was appointed an ED in the defunct Enterprise Bank in 2011,overseeing the bank’s operations in Lagos and other locations in the South-Western region.
Segun Agbaje, Group CEO, Guaranty Trust Holding Company Plc, who was appointed ED of the bank in 2000 is caught up with the new guidelines and is expected to relinquish his current position.
Others are Herbert Wigwe and Jim Ovia.
Mr Wigwe left Guaranty Trust Bank as an ED to co-lead the transformation of Access Bank Plc in March 2002 as DMD. He is currently the Group CEO,
Jim Ovia, currently Chairman, Zenith Bank, was the founder and pioneer MD/CEO of the bank from 1990 to 2010 when he moved into the chairman role.
Abubakar Suleiman, MD/CEO, Sterling Bank became ED, Retail Banking, in January 2013 before he was appointed CEO in April 2018.
Ladi Balogun, Group CEO, FCMB Group Plc, became CEO, First City Monument Bank Limited from 2007 to 2017 and is expected to relinquish his present position in line with the new CBN guidelines.
THEWILL findings further revealed that the new guidelines would dethrone Tony Elumelu as Chairman, United Bank for Africa where he superintended the Tier-1 bank as MD/CEO from 2005. He had held an executive position in Allstates Trust Bank which merged with UBA during the banking consolidation before becoming UBA MD/CEO.
Phillips Oduoza, Chairman, Nova Merchant Bank is also caught up with the new guidelines. He was GMD/CEO at UBA between 2010 and July 2016 when he retired to establish Nova Merchant Bank. He had earlier held several ED positions in Diamond Bank, Standard Trust Bank and UBA.
The circular which was signed by Chibuzo Efobi, Director, Financial Policy and Regulation Department. also read:
“Non-Executive Directors (NEDs), with the exception of Independent Non-Executive Directors (INED), shall serve for a maximum period of twelve (12) years in a bank, broken into three terms of four years each.
“EDs, DMDs and MDs who exit from the Board of a bank either upon or prior to the expiration of his/her maximum tenure, shall serve out a cooling-off period of 1 year before being eligible for appointment as a NED to the Board of Directors.
“NEDs who exit from the Board of a bank either upon or prior to the expiration of his/her maximum tenure of 12 years (3 terms of 4 years each), shall serve out a cooling-off period of 1 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 CBN stated that the policy was part of measures aimed at strengthening governance practices in the banking industry.
The circular added that the tenure requirements take effect from 24th February, 2023.
A source in the banking sector said this move will force persons at ED, DMD, and MD levels to leave early so that younger bankers can aspire to be at these positions instead of migrating to Canada, Europe, or America.