The Central Bank of Nigeria has issued a fresh directive compelling all Domestic Systemically Important Banks to obtain regulatory approval for the appointment of successor managing directors at least six months before the exit of incumbent chief executives.

In addition, the apex bank ordered that such appointments must be made public no later than three months before the outgoing CEO officially vacates office. The policy shift is part of broader efforts to strengthen corporate governance, reduce uncertainty, and preserve confidence in Nigeria’s financial system.

The directive was contained in a circular signed by the Director of Financial Policy and Regulation, Dr Rita Sike, and published on the CBN’s website on Tuesday.

“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.

“Publicly announce the appointment of the successor MD/CEO not later than three months to the planned exit of the incumbent MD/CEO.

Please ensure strict compliance.”

The CBN stressed that leadership uncertainty at large banks could destabilise the financial sector and, by extension, the wider economy.

The circular is anchored in Section 2.14 of the Corporate Governance Guidelines issued in 2023, which requires the boards of commercial, merchant, non-interest, and payment service banks to maintain robust succession plans for their most senior executives.

The guidelines are designed to ensure that banks have orderly transitions at the top, minimising risks linked to sudden leadership vacuums. According to the CBN, the new rule “seeks to minimise disruptions at the top management level, enable top management appointees to prepare adequately for their new roles, and generally mitigate risks associated with abrupt changes in leadership.”

Domestic Systemically Important Banks, often referred to as “too big to fail” institutions, play a crucial role in the financial system because of their size, complexity, and interconnectedness. A shock at such banks could ripple through Nigeria’s financial markets, threatening not only depositors and shareholders but also the stability of other institutions and the overall economy.

By tightening succession rules, the CBN aims to safeguard against leadership instability in these systemically important institutions, ensuring smoother management transitions and stronger resilience in times of uncertainty.

The apex bank explained that the directive brings Nigeria closer in line with international best practices, where regulators emphasise succession planning as a critical element of risk management in the banking industry.

Globally, many central banks and financial supervisory authorities require banks to maintain well-documented succession frameworks, not just for chief executives but also for other top management roles, to guarantee continuity of leadership.

The new directive comes on the heels of several high-profile leadership changes in Nigeria’s banking sector. Recently, Access Holdings Plc confirmed Innocent Ike as its substantive Group Managing Director after receiving CBN’s regulatory approval. His appointment followed the exit of Roosevelt Ogbonna from the board in line with corporate governance rules introduced by the apex bank.

Earlier, long-serving executive Seyi Kumapayi had also stepped down, reflecting the pace of boardroom transitions across the sector. The return of Aigboje Aig-Imoukhuede as chairman of Access Holdings, following the tragic death of former CEO Herbert Wigwe in 2024, underscored the need for deliberate and structured succession plans in Nigeria’s financial industry.

With the new directive, DSIBs now face tighter timelines and regulatory scrutiny over leadership changes. Banks must begin succession planning earlier in a CEO’s tenure, secure CBN approval six months ahead of the incumbent’s exit, and announce successors publicly three months before the handover date.

This timeline leaves little room for last-minute decisions, ensuring stakeholders — including employees, customers, investors, and regulators — have clarity about leadership continuity. For banks, the new rule may mean building deeper pipelines of executive talent, grooming internal candidates well in advance, and balancing the need for fresh perspectives with continuity in strategic direction.

Analysts say the move is intended to send a signal of stability in a sector often rattled by external shocks such as currency volatility, inflation, and rising interest rates. The new rules could also reduce rumours and speculation about leadership changes, which sometimes disrupt market confidence and trigger investor anxiety.

Industry players have generally welcomed the policy, describing it as a necessary safeguard. A senior executive at one of Nigeria’s top-tier banks noted that while the timelines may appear tight, they would compel boards to strengthen their talent management frameworks.

However, some experts caution that banks may face challenges if unexpected exits occur, such as sudden resignations or the death of a serving CEO. In such cases, they argue, regulators must apply flexibility while still insisting on robust succession frameworks.

The directive is consistent with the broader reform agenda of the CBN under Governor Olayemi Cardoso, who has prioritised strengthening governance, transparency, and resilience in the financial sector.

Over the past two years, the bank has introduced a series of policies ranging from foreign exchange reforms to bank recapitalisation requirements, all aimed at building a more stable and globally competitive banking industry.

Succession planning now joins that list as a critical plank of reform, reinforcing the message that Nigeria’s financial institutions must be run with the highest governance standards.