By: John Danjuma Omachonu
The recent directive on Tenure limits by the Central Bank of Nigeria, (CBN) may have claimed another casualty in the Deputy Managing Director of Zenith Bank Plc, Adaora Umeoji, who has thrown in the towel.
Coming few days after the first casuality, Gbenga Shobo, former deputy managing director of First Bank of Nigeria, who stepped down from the Board of the bank with immediate effect, analysts said Ladi Balogun, Group CEO, FCMB Group Plc, who became CEO, First City Monument Bank Limited from 2007 to 2017 is expected to relinquish his present position, anytime soon, in line with the new CBN guidelines.
The CBN circular dated February 24, 2023 and which became effective stipulates that no bank executive is expected to surpass 20 years across the banking industry from the time of appointment as executive or non-executive director to deputy managing director and managing director.
Consequently, Umeoji’s exit
was announced in a corporate action that was filed with the Nigerian Exchange and obtained by Nairametrics.
Based on the notice, Umeoji resigned following the new CBN regulatory guidelines that put a timeline on the cumulative number of years senior bank officers could occupy executive board positions.
According to the statement signed by Company Secretary/General Counsel Michael Osilama Otu, the resignation took effect on February 24. 2023.
With over 20 years of cognate banking and broad executive management experience, Dr Adaora Umeoji rose through the ranks to her current position.
Also, Shobo who served as the MD designate in Firstbank during a boardroom crisis in 2021 had been on the board of the bank since 2012, and has been an executive director in the bank for 11 years.
Indeed, CBN’s circular had stipulated that 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.”
Interestingly, the circular which comes 13 years after the initial limit of a 10-year tenure for bank MDs also places a limit of 12 years for deputy managing directors, executive directors as well as non-executive directors.
Consequently, bank and financial holding executives such as MD of Heritage Bank, Ifie Sekibo, MD of Access Corporation, Herbert Wigwe, MD of Guaranty Trust Holding Company, Segun Agbaje, founder and Chairman of Zenith Bank, Jim Ovia as well as Chairman of United Bank for Africa, Tony Elumelu may be affected.
Since the new directive was unveiled on February 24, Checks by metrobusinessnews (MBN) revealed that the industry has been unsettled as many prominent bank executives and non-executive board members are affected.
But the new directive has continued to generate discussions among analysts and financial commentators taking sides on the policy divide.
While some see the policy as a positive development as it aides easier implementation of succession plans as well as accelerating career path of younger ones that have remained stagnated as most banks are top heavy, others say the policy could lead to dearth of experienced professionals, who may still be agile and relevant in the industry.
They also say, extending it to HoldCo companies amounted to an ‘overreach’.
Besides, they contend that CBN should have given the financial institutions enough time to have ease of transition.
Specifically, the proponents say If, however, within 12 years, Chief executives, for instance, could not develop and identify people who will take over from them, then that would mean those chief executives are not serious about succession planning and indirectly deliberately stagnating and jeopardizing the career progression of the younger ones.
According to them, the industry is not experiencing draught of intelligent and mobile professionals but that some have had to leave for abroad or to another sectors, having looked at the ‘sit tight syndrome’ of some chief executives, because there was no way they could get to the executive positions.
Opponents, on the other hand, say capping tenures, could amount to micro-management, which does not in any way, automatically guarantee good corporate governance principles in the organisations.
According to them, the basic requirements are setting the rules for bank operations, monitoring compliance and applying sanctions where necessary.
In 2010, the apex bank had issued the first guideline on tenures for bank executives, limiting tenures of chief executives of banks to 10 years, effectively sacking bank MDs whose tenure elapsed the 10 year stipulation giving them up to July 31, 2010 to comply.
Leave a Reply