The Central Bank of Nigeria, CBN, today , issued the Corporate Governance Guidelines for commercial, merchant, non-interest , payment service banks and Financial Holding Company, FHC, in Nigeria.
CBN noted that the Guidelines were issued in a bid to among other things outline industry-specific corporate governance standards for banks and promote high ethical standards amongst operators, whilst enhancing public confidence.
In a circular signed by the Director Financial Policy and Regulation Department, CBN, Mr. Chibuzo Efobi, the apex bank said:”In exercise of powers conferred by CBN Act 2007 and the Banks and Other Financial Institutions Act 2020, the CBN hereby issues the Corporate Governance Guidelines for commercial, merchant, non-Interest, and payment services banks in Nigeria, and the Corporate Governance
Guidelines for FHC in Nigeria.
“In developing these Guidelines, the CBN adapted relevant principles and recommended practices of the Nigerian Code of Corporate Governance issued by the Financial Reporting Council in 2018, global corporate governance practices as well as other related governance codes, circulars and directives made by the CBN.
“Banks and financial holding companies are invited to note the responsibilities imposed on their boards by these guidelines, and especially on the Executive Compliance Officers (where applicable). “These Guidelines supercede all previous codes, circulars and related directives on corporate governance issued by the CBN.
“The effective date of these Guidelines is August 1, 2023.”
The apex bank also noted that the directors, managers or any officer of any Financial Holding Company (FHC) that breaches the guidelines will be suspended for six months in the first instance and
possible removal from the board or employment.
Section 27 of the guidelines stated:”Failure of an FHC to comply with any of the requirements under this Guidelines and the recommended practices in Nigeria Code of Corporate Governance, NCCG, 2018, constitutes a regulatory breach and shall attract a penalty as may be prescribed by the CBN.
“Rendition of false, misleading and/or incomplete information to the CBN shall
attract appropriate sanctions including monetary penalties and administrative sanctions on the FHC and/or its directors.
” Breach of any of the provisions of this Guidelines by a director, manager or officer of the FHC shall attract appropriate sanctions including monetary penalties and administrative sanctions on the individual responsible for the breach.
“In addition to the provision of section 27.3, such director, manager or officer of the FHC shall be suspended for six months in the first instance and possible removal from the board or employment of the FHC in the event of continued reoccurrence.”