Banking titans Jim Ovia and Tony Elumelu, who have dominated the sector in recent years, are among those who must step down on or before July 31 this year, under new guidelines by the new Central Bank of Nigeria (CBN) limiting the tenure of bank chieftains to 10 years.
Mr. Ovia has been the managing director/chief executive of Zenith Bank Plc from its inception in May 1990, while Mr. Elumelu, who served as the managing director of the defunct Standard Trust Bank (STB) in 1995, emerged as the group managing director/chief executive of United Bank for Africa (UBA) in 2004, following the merger of the two banks.
Akinsola Akinfemiwa, the managing director/chief executive of Skye Bank Plc, will also be affected by this guideline, as he assumed position in 2000.
The new guidelines announced yesterday (Tuesday) at the end of the Bankers Committee's meeting in Abuja, are in line with the ongoing banking reform initiated by Sanusi Lamido Sanusi, the Central Bank governor, to enthrone good governance in the nation's financial system.
It's all about institutions
Samuel Oni, the bank's director of banking supervision department, who announced the guidelines, said they are designed to help define the tenure of banks' managing directors and chief executives and institutionalise the appointment of banks' chief executives.
"Those CEOs of banks that are affected by new guidelines have been given up to July 31 to prepare a successor as approved by their boards and have a credible succession programme that would be monitored by their boards and subjected to the monitoring to the CBN," Mr. Oni explained.
He disclosed that the directive, which has already been communicated to the managements of all the 24 Nigerian banks, is also to ensure that banks have a good succession plan as well as avoid the temptation of personalising their institutions.
"In terms of the appointment of the CEOs of banks, the conditions and terms under which they were appointed and approved by the board must also be ratified and approved at the annual general meetings and such terms of appointment in the first instance shall not exceed five years, though it is renewable for another term, provided that the period of service cumulatively does not exceed 10 years," he added.
No exemptions
Mr. Oni further clarified that where a bank is a product of a merger, acquisition, take-over or any other form of determination, the 10 year period shall include the pre and post-combinations of the bank CEO's years, provided that the bank that he served was part of the new bank that emerged after the combination.
Any person who has served as chief executive for the maximum tenure in a bank shall not qualify for appointment in that bank or its subsidiary until after a period of three years of his exit as CEO.
CBN, NDIC also included
The new guidelines also affect the governor and deputy governors of the Central Bank as well as the managing director/chief executive and deputy directors of the Nigerian Deposit Insurance Corporation (NDIC). They are also disqualified from being appointed in any capacity in banks and their subsidiaries under the supervision of the CBN and NDIC, until after the expiration of five years from the date of their exit from the CBN or NDIC.
Also, departmental directors of the CBN and NDIC are declared ineligible for appointment in any capacity in the banks and their subsidiaries under the supervision of the CBN and NDIC, until after the expiration of three years from the date of their exit from the CBN or NDIC.
However, Mr. Oni said the directive does not affect persons that have already retired from these positions, adding that henceforth, all banks are expected to ensure that these guidelines are reflected in the terms of agreement of their chief executive officers.
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