Central Bank of Nigeria (CBN) has instructed all Domestic Systemically Important Banks (DSIBs) to strengthen succession planning.
Gatekeepers News reports that DSIBs are banks regarded as “too big to fail” because their collapse, due to size and interconnectedness, could trigger serious disruption to the wider financial system and economy.
In a circular, CBN asked DSIBs to announce the appointment of new managing directors (MDs) at least three months before the exit of the current officeholders.
In a circular signed by Rita Sike, director of financial policy and regulation, CBN explained that the directive is designed to minimise disruptions during leadership changes and safeguard the stability of the financial sector.
The apex bank said boards of DSIBs must obtain regulatory approval for the appointment of successors no later than six months before the end of a managing director’s tenure, while the appointment must be made public at least three months before the incumbent leaves office.
According to the circular, the requirement is meant to reduce disruptions at the top level of management, allow appointees time to prepare for their new roles, and limit risks associated with abrupt leadership changes.
The bank added that effective succession planning remains a key aspect of good corporate governance, especially for DSIBs, which play a critical role in ensuring the stability of the financial system.
