Nigerians would ordinarily have welcomed the directive of the Central Bank of Nigeria (CBN) vide its circular dated February 24, imposing new tenure limits on executive management and non-executive directors of banks and financial institutions in the country, save the need for further clarification. The tenure limits, said to be part of measures aimed at strengthening governance practices in the banking industry pegs the tenure of executive directors (EDs), deputy managing directors (DMDs) and managing directors (MDs), at 10 years.

According to the circular: “Where an executive who is a DMD becomes the MD/CEO of a bank or any other DMB before the end of his/her maximum tenure, the cumulative tenure of such executive shall not exceed twelve (12) years.

“However, for an executive (ED) who becomes a DMD of a bank or any other DMB, his/her cumulative tenure as ED and DMD shall not exceed 10 years.”

“Non-executive directors (NEDs), with the exception of independent non-executive directors (INEDs), shall serve for a maximum period of 12 years in a bank, broken into three terms of four years each.

“EDs, DMDs and MDs who exit from the board of a bank either upon or prior to the expiration of his/her maximum tenure, shall serve out a cooling-off period of one year before being eligible for appointment as a NED to the board of directors”.

In all, the executives can only serve a cumulative tenure of 20 years across the banking industry.

To the apex bank, the measures would help strengthen the governance structures of the institutions, while creating a systemised pathway for promoting and retaining talents in the industry.

Surely, only the undiscerning would fail to see the façade for what it is. In 2010, Sanusi Lamido Sanusi as CBN governor had initiated a similar measure to address what he proclaimed as “corporate governance issues”.

“All CEOs who would have served for 10 years by July 31, 2010 shall cease to function in that capacity and shall hand over to their successors,” the apex bank boss had pronounced at the time.

Twelve-years-plus on, nothing could be said to have changed in practical terms. For instance, Tony Elumelu retired from the United Bank for Africa (UBA) Plc in 2010 only to come back in August 2014 as the bank’s chairperson. Ditto Jim Ovia; he left Zenith Bank Plc in July 2010 and returned as the bank’s chairperson on July 16, 2014. Segun Agbaje, the erstwhile helmsman of Guaranty Trust Bank (GBT) retired on July 15, 2021 and immediately became the holding company’s (holdco’s) chief executive officer (CEO) in the same month, the same manner that Herbert Wigwe of Access Bank Plc (until May 2022), became the chief executive officer of the bank’s parent holding company and has remained the chairperson of Access Bank, United Kingdom (UK) since 2008.

To the extent that these corporate chieftains have not only remained permanent fixtures in their respective banks but are still firmly entrenched under the new-fangled structure of ‘holding companies’ of the entities which they also created, the question of whether or not the directives are a nullity is not even moot.

We deplore the situation whereby a few individuals would entrench themselves in the banks, becoming demi-gods, more or less, and understand the apex bank’s acknowledgment that this is bad for the financial sector. It is just like some of our political officers who, after tasting the fruits of political offices, do not want to leave the system till death do them part. Thus, you have a situation where someone steps down as governor after eight years, moves to the senate and from there becomes minister or an ambassador, etc. This recycling has not been helpful in the banks as it has not in the political system. The problem with the new CBN directives is whether they are far-reaching to address the issue of corporate governance in the banks.

Surely, for us, it is hard to see any real changes coming in the aftermath of the new tenure rule. What we do know is that the 10-year rule that applies to bank managing directors still does not extend to bank chairpersons. Or, is the CBN saying that the matter of the relationship between a holdco and a bank (operating entity) and the boards of directors does not matter? Isn’t that, in practical terms, conveniently side-stepping the weightier issue of corporate governance advertised by the apex bank as underlying the issue of tenure?