CBN’s New Rule: Banks Must Get Approval for CEO Successors Six Months Ahead -

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By Johnson Folarin

The Central Bank of Nigeria (CBN) has introduced a major policy shift, directing all Domestic Systemically Important Banks (DSIBs) to secure regulatory approval for the appointment of successor managing directors at least six months before the current CEO exits office.

The apex bank also ordered that such appointments must be made public no later than three months before the outgoing chief executive officially vacates office. The new directive, issued in a circular signed by Dr. Rita Sike, Director of Financial Policy and Regulation, was published on the CBN website on Tuesday.

According to the circular, the move is designed to strengthen corporate governance, prevent uncertainty at the top, and preserve investor and public confidence in Nigeria’s financial system.

Why the New Rule Matters

The CBN stressed that sudden leadership changes in large banks could destabilise not only the financial sector but also the wider economy. By enforcing early succession planning, the regulator hopes to avoid leadership vacuums that could trigger market anxiety, speculation, or operational disruptions.

Domestic Systemically Important Banks, often labelled “too big to fail”, control a significant share of Nigeria’s financial assets, meaning instability at the top of these banks could ripple across the entire economy.

The directive is anchored in the 2023 Corporate Governance Guidelines, which mandate all banks — commercial, merchant, non-interest, and payment service banks to maintain robust succession plans for senior executives.

Aligning with Global Best Practices

Globally, regulators have increasingly emphasised succession planning as a critical element of risk management. The CBN says its new rule brings Nigeria closer in line with international standards, where banks are required to maintain documented frameworks for leadership continuity, not just for CEOs but also for other top executives.

The directive comes amid several high-profile leadership changes in Nigeria’s banking industry, including recent transitions at Access Holdings Plc following the tragic death of former Group CEO Herbert Wigwe in 2024.

Industry Reactions and Implications

Analysts say the new rule could reduce uncertainty, improve investor confidence, and compel boards to groom internal talent pipelines more deliberately. However, some experts warn that unexpected exits such as sudden resignations or deaths could pose challenges, requiring regulatory flexibility in implementation.

Industry insiders have largely welcomed the policy. A senior executive at a Tier-1 bank told reporters that while the timelines may seem tight, they will push boards to strengthen talent management frameworks and avoid last-minute succession battles.

For banks, the directive means tighter planning, earlier board decisions, and greater regulatory scrutiny. For the CBN under Governor Olayemi Cardoso, it is another step in a broader reform agenda aimed at building resilience, transparency, and global competitiveness in Nigeria’s financial system.