The Central Bank of Nigeria (CBN) has introduced a new regulation requiring Domestic Systemically Important Banks (DSIBs) to secure regulatory approval for their Managing Director/Chief Executive Officer (MD/CEO) successor at least six months before the current MD’s tenure ends.
This move is aimed at bolstering corporate governance and safeguarding the stability of Nigeria’s financial system, particularly among the largest banks that hold significant sway over the economy. The directive was issued in a circular signed by Dr. Rita Sike, Director of the Financial Policy and Regulation Department at the CBN, and comes as part of broader efforts to mitigate risks associated with abrupt leadership transitions.
According to the CBN’s directive, banks must obtain regulatory approval for their next MD/CEO ahead of time, ensuring leadership continuity. In addition, banks are mandated to publicly announce the successor no later than three months before the current MD/CEO exits. This approach aligns with the CBN’s 2023 Corporate Governance Guidelines, which have been increasingly adopted by Nigeria’s financial institutions.
The CBN emphasized that these changes are necessary to minimize disruptions that can destabilize financial operations and help ensure a smooth transition of power at the helm of the country’s largest financial institutions. “This requirement seeks to minimize disruptions at the top management level, enable top management appointees to prepare adequately for their new roles, and mitigate risks associated with abrupt changes in leadership,” the circular stated.
The latest regulatory push underscores the CBN’s determination to bring Nigerian banking practices in line with international standards. Banks must now adopt a proactive stance in preparing for leadership changes. The move comes on the heels of several recent leadership shifts at key financial institutions, including Access Holdings Plc, which appointed a new MD/CEO, Mr. Innocent Ike, in late August 2025.
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As part of the move towards greater corporate governance, the CBN also aims to fortify the resilience of Nigeria’s financial sector against external and internal shocks. With banks deemed “too important to fail” due to their interconnectedness with the broader economy, the CBN’s intervention is poised to assure stakeholders of the system’s ongoing stability.
The CBN’s proactive stance is expected to serve as a safeguard against the uncertainties that typically arise from unexpected leadership changes, ensuring that stakeholders—from customers to investors—can remain confident in the long-term stability of Nigeria’s financial ecosystem.
By compelling banks to engage in advanced succession planning, this directive is not just about compliance but fostering a banking culture where continuity and governance are prioritized, safeguarding both local and international investments in the Nigerian economy.
