The Central Bank of Nigeria (CBN) has rolled out a new directive requiring Domestic Systemically Important Banks (DSIBs) to seek its approval for incoming managing directors at least six months before the current CEO’s tenure ends.
These banks must also disclose the name of the successor publicly three months before the transition.
According to the circular signed by Dr. Rita Sike, Director of Financial Policy and Regulation, and published on the CBN website on September 17, 2025, the move is designed to close leadership gaps, enhance corporate governance, and build public confidence in Nigeria’s financial system.
What the New Rule Says
The policy draws on Section 2.14 of the 2023 Corporate Governance Guidelines, which calls for clear succession plans for senior executives across commercial, merchant, non-interest, and payment banks.
Under the new rule, “too big to fail” banks must secure regulatory clearance for a new MD/CEO at least six months ahead of time and announce the appointment three months before the current chief steps down.
The CBN warns that sudden leadership changes in large banks can destabilize both the financial sector and the broader economy.
Why It Matters
By enforcing early approval and public disclosure, the central bank aims to minimise disruptions, allow new leaders adequate preparation time, and reduce uncertainty for depositors, investors, and other stakeholders.
The directive mirrors global regulatory standards, where central banks require detailed succession planning to manage risks and ensure smooth leadership handovers.
Recent Leadership Changes
The policy comes after several high-profile leadership shifts in Nigeria’s banking industry. Access Holdings Plc recently secured CBN’s approval for Innocent Ike as Group Managing Director following Roosevelt Ogbonna’s departure.
Earlier, Seyi Kumapayi stepped down, and Aigboje Aig-Imoukhuede returned as Access Holdings chairman after the death of Herbert Wigwe in 2024—examples that underscore the importance of planned transitions.
What DSIBs Must Do Now
With tighter timelines, systemically important banks will need to develop deeper talent pipelines, train potential successors early, and balance fresh ideas with stable strategies.
Analysts believe the policy will signal stability amid inflation, currency volatility, and high interest rates, while reducing speculation that can erode market confidence.
Industry Reactions
Many bank executives have welcomed the rule as a step toward stronger governance, though some caution that sudden resignations or unforeseen events could test the framework.
They suggest the CBN may need to retain some flexibility for extraordinary circumstances.
Part of a Broader Reform Agenda
Governor Olayemi Cardoso has made corporate governance and resilience central to his reforms.
Alongside changes to the foreign exchange market and higher capital requirements for banks, this succession-planning directive reinforces Nigeria’s push to align with international best practices and strengthen confidence in its financial institutions.
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