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The Central Bank of Nigeria (CBN) has introduced stricter succession planning rules for Domestic Systemically Important Banks (DSIBs), directing them to secure regulatory approval for the appointment of a successor managing director at least six months before the departure of an incumbent CEO.

The apex bank also mandated that such appointments must be made public no later than three months before the outgoing chief executive formally steps down.

The directive, contained in a circular signed by the CBN’s Director of Financial Policy and Regulation, Dr. Rita Sike, and published on Tuesday, is aimed at strengthening corporate governance, minimising leadership uncertainty, and boosting confidence in the stability of Nigeria’s financial system.

“Consequently, and in line with good corporate governance practice, each DSIB is hereby required to: Ensure it obtains regulatory approval for the appointment of a successor Managing Director not later than six months to the expiration of the tenor of the incumbent MD/CEO; [and] publicly announce the appointment of the successor MD/CEO not later than three months to the planned exit of the incumbent MD/CEO,” the circular stated.

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The CBN noted that leadership uncertainty at large banks poses significant risks, with the potential to destabilise the financial sector and, by extension, the wider economy.

The new rule is anchored in Section 2.14 of the Corporate Governance Guidelines issued in 2023, which requires banks to maintain robust succession frameworks for their most senior executives. The guidelines seek to ensure smooth leadership transitions, give incoming CEOs time to prepare adequately, and reduce risks linked to abrupt changes at the top.

DSIBs, often described as “too big to fail,” play a critical role in the financial system due to their size, complexity, and interconnectedness. A shock in such institutions could trigger ripple effects across Nigeria’s financial markets, threatening depositors, investors, and other banks.

By tightening succession requirements, the CBN said it is aligning Nigeria more closely with international best practices, where regulators place strong emphasis on leadership continuity as part of risk management in banking. Globally, central banks and financial supervisory bodies require lenders to maintain documented succession plans not only for CEOs but also for other top management roles.

The directive comes amid a wave of leadership changes in Nigeria’s banking industry. Recently, Access Holdings Plc confirmed Innocent Ike as Group Managing Director following CBN’s approval, after the exit of Roosevelt Ogbonna. Earlier, Seyi Kumapayi also stepped down, while Aigboje Aig-Imoukhuede returned as chairman of Access Holdings following the sudden death of former CEO Herbert Wigwe in 2024 — developments that highlighted the importance of structured succession planning.

Under the new rules, banks must now begin identifying and grooming successors much earlier, balancing continuity with the need for fresh perspectives. Analysts say the move could help reduce speculation around leadership changes, improve investor confidence, and signal stability in a sector often tested by inflation, currency volatility, and rising interest rates.

While industry players have broadly welcomed the policy, some experts warn of potential challenges in cases of unforeseen exits, such as sudden resignations or death. They argue that regulators may need to exercise flexibility in such exceptional circumstances while maintaining strict oversight of succession frameworks.

The policy forms part of broader reforms under CBN Governor Olayemi Cardoso, who has prioritised strengthening governance, transparency, and resilience in the financial system. Alongside recent foreign exchange reforms and bank recapitalisation requirements, succession planning is now a central pillar of efforts to safeguard the stability and competitiveness of Nigeria’s banking industry.

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