CBN Tenure Policy: Banking industry’s finests take a bow 

The CBN announced in February 2023 that the maximum (cumulative) number of years that a banker who has attained the level of executive management, that is, an executive director (ED), a deputy managing director (DMD) or a managing director (MD) can stay active in the banking industry is twenty years, irrespective of the institution. It means that an individual cannot exceed twenty years in the industry after attaining ED or DMD position. Recall that when officials reach the position of ED or DMD, they can move from one bank to another bank, one level to the next or one role to another, including transitioning to the Board as non-executive director (NED).

Typically, career movement is along ED, DMD, MD, NED and chairman of the board. This status can be acquired in the same bank or a combination of banks. For instance, an official who was an ED in Bank A attained DMD in the same Bank but proceeded to Bank C as MD, finishes his tenure as MD, becomes a NED in Bank C, and then becomes chairman of the board, would need to combine all his years of service which must not be more than twenty years. No official will be allowed to accumulate more than twenty years along this journey. This policy will no doubt see the sudden end of the career of some of the most didactic bankers of our generation.

In 2010, a similar incident occurred when the CBN released a policy to enforce the maximum of ten years a managing director can serve in that capacity. That policy saw the exit of some powerful and finest of bank chief executives. Caught on that list were the likes of Mr Jim Ovia of Zenith Bank Plc, Mr Tony Elumelu of UBA Plc, Mrs Cecelia Ibru of Oceanic Bank Plc, Mr Erastus Akingbola of Intercontinental Bank Plc, Mr Francis Atuche of Bank PHB Plc, Mr Akinsola Akinfemiwa of Skye bank Plc, Otunba Subomi Balogun of FCMB Plc among others. It was the era of Bank Founders who doubled as chief executive officers. They were intelligent, brilliant and powerful. While some had long overstayed and were way ahead of the stipulated ten years maximum, some were just ten years on the dot or slightly above. To keep their experience relevant, the policy specified a cool-off period of 4 years, after which they could return to the bank as NED. While a few could return as NED or chairmen of their boards, many could not, as their banks had experienced significant transformation, placing them in the hands of new henchmen.

With the effluxion of time, those henchmen that were hitherto new kids on the block have become the golden bankers of today and, through another policy, permit me to describe as the second wave, are undoubtedly the direct victims. They have built their various institutions and transformed them to become global brands and, like their predecessors, have also become powerful and influential.

While many of the current victims had worked around the former policy that stipulated ten years as the maximum for MDs by creating a Holding Company (HoldCo) model where the retiring MD is expected to ascend to the leadership of the HoldCo and oversee the various financial buckets of the HoldCo including the bank, I guess that they did not see the 20 years maximum in the industry coming. The CBN approves the HoldCo status for all banks, which puts them under the regulator.

As the policy takes immediate effect, the absence of some bankers will be immediately felt in the industry. For instance, the likes of Mr Jim Ovia, Mr Tony Elumelu, Mr Segun Agbaje and Mr Herbert Wigwe, while bowing to the effect of the policy, will be greatly missed.

Segun Agbaje joined GT Bank as a pioneer staff in 1991 and became executive director in January 2000 and deputy managing director in August 2002. He was later appointed as the substantive MD and CEO of GTBank in June 2011 at the demise of Tayo Aderinokun, its former CEO. He has a cumulative stint of 23 years as a bank executive.

Tony Elumelu as a young banker acquired and turned around Standard Trust Bank in 1997, which would later, in 2005, acquire United Bank for Africa (UBA). In 2010, he retired in compliance with the first wave of policy on tenure implementation but returned four years later as chairman of the bank’s board. It would therefore be safe to say that he has about 26 years of experience as a bank executive outside the years spent in the industry before he emerged as CEO of Standard Trust Bank.

Jim Ovia founded Zenith Bank in 1990, retired during the first wave in 2010 in similar circumstances after the mandatory ten years, returned after four years in 2014 as a NED and has retained that status since then. As an executive, Mr Ovia has comfortably served about 33 years, his prior years not counting.

Herbert Wigwe is the managing director of Access Corporation (a Holding Company). He was appointed ED in Guaranty Trust Bank in 1998, DMD in Access Bank in 2002, GMD/CEO of Access in 2014, and appointed as NED in 2022. He has a cumulative stint of 25 years as an executive, his prior years not counting.

As good as the policy may sound, many have picked holes stating that its implementation deprives the industry of such experienced talents and takes away the shine, glamour and flair with which these individuals do their jobs. While they can be described as influential with the capacity for mentoring young bankers, the industry requires their experience and influence for stability. For instance, Mr Yemi Adeola of Sterling Bank Plc retired in his prime when many felt he still had a lot to offer the bank. Because he was proactive, he had spent time grooming a worthy successor. Though he was not CEO from joining Sterling, his previous position as a CBN-approved executive contributed, denying the institution the experience of an amiable and highly talented banker.

Yemi Adeola is the former MD of Sterling Bank Plc. He joined Sterling Bank through a merger with Trust Bank in 2005, where he was deputy CEO. He started as an ED and later became CEO of the bank between January 2006 and June 2018. His over 12 years as an executive accounted for his retirement.

Another school of thought has argued that the policy has brought fresh air to the sector as it was becoming tiresome to have the same set of names circulating in the industry. It did not promote growth but stifled talents. The CBN has also mentioned its ability to stem the brain drain ravishing the sector. Through the policy that ensured vacancy at the top, for instance, present executives like Mr Abu Suleiman of Sterling Bank, Emma Emefienim of Premium Trust Bank, Adaeze Udensi of Titan Trust and Miriam Olusanya of GTBank are contributing to the richness of the industry today.

In conclusion, the Chartered Institute of Bankers of Nigeria (CIBN) should initiate a Hall of Fame for Nigerian Bankers and immediately admit these individuals who honourably bow to the policy. In addition, develop a resource material around the biographies of these individuals, which should be introduced into all CIBN-conducted professional examination modules. This will tell their stories and spur the younger generation to either preserve the existing institutions or build new, more robust, and enduring ones.

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