In what seems like a direct criticism of the Central Bank of Nigeria Governor, Godwin Emefiele, Zenith Bank Plc shareholders have accused the CBN boss of sabotaging banks by limiting the tenure of Executive and Non- Executive directors of Nigerian banks…..CONTINUE READING...CONTINUE READING
The Chairman Emeritus of the Independent Shareholders Association of Nigeria (ISAN), Sunny Nwosu, and the President of the Association of the Rights of Nigerian Shareholders (AARNS), Umar Farouk, who are the shareholders’ representatives made the argument at the 32nd Annual General Meeting of the Zenith Bank, monitored by THE WHISTLER.
The CBN in the revised edition for banks corporate governance released in February 2023 stated that the cumulative tenure limit for Executive Directors, Deputy Managing Directors, Managing Directors, and Non-Executive Directors across the banking industry shall not exceed 20 years.
The apex bank believes the new tenure would strengthen its corporate governance structure.
Part of the new rule is Executive Directors, Managing Directors, and Deputy Managing Directors will not exceed ten years.
The circular said, “Non-Executive Directors (NEDs), with the exception of Independent Non-Executive Director (INED), shall serve for a maximum period of twelve (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 1 year before being eligible for appointment as a NED to the Board of Directors.
“NEDs who exit from the Board of a bank either upon or prior to the expiration of his/her maximum tenure of 12 years (3 terms of 4 years each), shall serve out a cooling-off period of 1 year before being eligible for appointment to the Board of Directors of any other DMB.
“The cumulative tenure limit of EDs/DMDs, MDs and NEDs across the banking industry is 20 years.”
But Farouk accused Emefiele, a former MD of the bank before occupying the role as CBN Governor of being inconsiderate.
According to him, the new rule is an attempt to make shareholders tenants in their own bank.
Farouk said, “The election has come and gone and we are going to have a new government. Of course, Mr Chairman, we have seen the different regulations being brought by CBN to the extent that CBN of today is trying to make me a tenant in my own house.
“We are shareholders of Zenith Bank. We are satisfied with our board performance and I don’t think it is right for the CBN to say that they will now dictate who should be on our board.
“Nobody can make you a tenant in your house. Somebody has put his money; he has established his business. It is like telling Dangote that he should not be a director on the board of the refinery and that he should bring somebody.
“It is not done and I’m appealing to our friend, our former colleague (Emefiele) who is the CBN Governor to revisit this issue because we have not violated anything. CBN should be concerned with the quality and performance of the board. If there are infractions, they can intervene. I appeal to the CBN Governor to revisit this issue and allow our directors. While we need new hands, we also need experience. Experience to me is more than the other criteria the CBN is looking for.”
Similarly, Nwosu in his remark also criticized the Cash Reserve Requirement of banks saying the funds are locked up with the CBN without interest.
The CRR is the minimum amount banks are expected to retain with the CBN from customer deposits.
CRR is 32.5 per cent of customer deposits held by commercial banks. He further criticized the new policy that limits the tenure of bank executive and non-executive directors.
Nwosu said, “We have a locked-up fund and we have been shouting year in and year out the Central Bank to allow the banks to make use of part of the compulsory deposit to bake more cake for the shareholders to enjoy. I think it is time they have to consider giving interest on that loan.
“How can you lock up billions of naira and you are not paying any interest? What surprises me is that the head of the Central Bank today was the MD of the commercial bank and he also agree with the cry and appeal to Central Bank. Now he is the Governor of the Central Bank, he is not even helping us to look into that area other than penalty, penalty, and penalty.
“Central Bank policies, these are things they themselves do not imbibe. After working for so many years, knowing the system and so many things, suddenly a circular comes to say if you have served this number of years, you have to go…..CONTINUE READING
