The Central Bank of Nigeria (CBN) has issued a new directive mandating all banks in the country to obtain regulatory approval at least six months before appointing successors to their managing directors (MDs) or chief executive officers (CEOs). The policy, the apex bank explained, is designed to ensure smooth leadership transitions, strengthen corporate governance, and safeguard the stability of Nigeria’s financial sector.
In a circular released to deposit money banks and other financial institutions, the CBN noted that succession planning remains a critical element of sustainable management. By requiring early submission of proposed candidates for approval, the regulator aims to avoid leadership gaps that could disrupt operations or undermine investor confidence. The directive also reaffirms the apex bank’s commitment to enhancing transparency and accountability in boardroom practices.
According to the CBN, banks must not only notify the regulator of upcoming leadership changes but also provide comprehensive details of the shortlisted candidates, including their professional qualifications, track records, and compliance with fit-and-proper requirements. The move, the bank added, will help ensure that only individuals with proven competence, integrity, and industry experience are entrusted with the top leadership positions.
Analysts believe the policy is a proactive step in addressing governance lapses that have, in the past, contributed to financial instability in the sector. By enforcing timely succession planning, the CBN hopes to prevent last-minute appointments that may prioritize internal politics over merit, thereby protecting the interests of depositors, shareholders, and the broader economy.
The directive comes at a time when Nigerian banks are facing increased scrutiny over risk management, capital adequacy, and compliance with evolving regulatory standards. Experts argue that effective leadership at the top remains vital to navigating challenges such as digital transformation, cyber threats, and global economic headwinds that continue to shape the banking industry.
While the policy has been welcomed by many stakeholders, some industry insiders note that it may pose challenges for smaller banks with limited executive pipelines. However, proponents argue that the directive could encourage institutions to invest more in talent development, succession planning, and long-term leadership grooming.
The CBN assured stakeholders that the new rule is not intended to disrupt operations but to reinforce governance structures in line with global best practices. With this directive, Nigeria joins other emerging markets in tightening regulatory oversight of banking leadership, as the industry prepares for a future defined by innovation, competition, and heightened regulatory expectations.
