Gone are the days when some bank CEOs appoint themselves or loyalists and steer the leadership wheel as long as they want to. Bank CEOs could lead for 15 years and more.
However, in 2010, the then governor of the Central Bank of Nigeria, Sanusi Lamido Sanusi introduced a policy in the banking system, fixing 10 years to be the maximum duration for bank CEOs.
According to Sanusi, the decision of the board of the CBN then is aimed at upholding good corporate governance practice in the banking system, adding that long term tenure for CEOs could foster misdemeanor, especially with depositors’ funds involved.
The season saw the retirement of the likes of Jim Ovia, the managing director of Zenith Bank; Tony Elumelu, the Group Managing Director of UBA; and Akinsola Akinfenwa, the Group Managing Director of Skye Bank in July 2010.
Like the year 2010, 2020 has witnessed the retirement of CEOs of some major commercial banks in the country; the likes of Nnamdi Okonkwo (Fidelity Bank), and Tokunbo Abiru (Polaris Bank). Union Bank’s CEO, Emeka Emuwa and Guaranty Trust Bank’s Segun Agbaje will also be stepping down December 31, 2020 and June 22, 2021 respectively.
It will be recalled that on July 20 this year, the board of directors of Fidelity Bank sent a press release to the Nigerian Stock Exchange as required, to notify the NSE and the general public of the impending retirement of Nnamdi John Okonkwo with effect from December 31st, upon completion of his six-year tenure.
It was added that the position will be occupied by Mrs. Nneka Onyeali-Ikpe and the approval of the Central Bank of Nigeria has been obtained for her appointment. According to the company’s website, Okonkwo-led administration grew its customer base by 121% from 2.4 million to 5.3 million.
The bank also accessed local and international markets through the issuance of N30 billion Corporate Bonds in 2015 and $400 million Eurobonds in 2017 under his leadership, among other things. It is important for the incoming CEO to build on the legacies of Okonkwo to take the bank to an enviable height.
In the same vein, the board of Polaris Bank announced that Tokunbo Abiru would be stepping down as its CEO, with effect from August 31st; a position he held since July 2016. In line with good corporate governance practice in the banking system, the bank has appointed Innocent Ike as the acting CEO, effective from September 1, 2020.
Based on reports by national dailies, the former CEO, Abiru has been pivotal to the growth of the bank. As at the time Tokunbo Abiru took over leadership of the bank, the bank was in a nearly dead state, but he resuscitated it through the formulation and implementation of radical policies and digital innovativeness during a 4-year period.
Through his strategic leadership, Union Bank unveiled its new mobile money app, which allows customers to make business transactions with just a few clicks on their smartphones.
His administration also made funding options available to SMEs in the informal sector. Abiru moved the bank from a position of loss to Profit After Tax (P.A.T) of over N18 billion in the first half of 2020, according to the company’s website.
As good as this appears, the bank’s customers seem dissatisfied with its service, due to incessant cases of fraud; a situation yet to be resolved. The bank has a reputation of high employee fraud.
This is a situation that even Abiru couldn’t turnaround. Meanwhile, reputation management is important for the long-term continuity of an organisation, especially one that deals with customers’ assets such as a bank.
Will Innocent Ike be able to change this narrative and build customers’ trust? The bank’s inability to redeem its image will in the long run jeopardise its market competitiveness.
In addition to the aforementioned, the board of Union Bank in a press release, also announced that its CEO, Emeka Emuwa will step down from office on March 31, 2021.
Emuwa joined the bank in November 2012, at a time when the bank was trying to recover from hard financial times caused by the 2009 banking sector crisis.
Leveraging technological solutions and digital innovations, Emuwa grew Union Bank’s revenue from N79.6 billion in 2013 to N111.8 billion in 2020, according to Nairametrics. It is expected that the incoming CEO, Emeka Okonkwo create a structure that drives adaptability and digital innovativeness to remain resilient amidst the uncertainties evident in the global economy today.
It is also good to note that GTB’s Segun Agbaje is scheduled to relinquish his position as the bank’s CEO on June 22, 2021. Agbaje was appointed CEO of the bank in June 2011.
According to Investdata, a financial consulting company, the search for the next CEO of the leading bank is restricted to either of the existing five executive directors, namely; Ademola Odeyemi, Haruna Musa, Jubril Lawal, Miriam Chidiebele Olusanya, and Babjide Okuntola.
The choice of a forward-thinking and resilient CEO has become more pertinent for the bank especially with the existence of Covid-19, inflation, amidst other economic uncertainties. This is a decision that requires careful consideration and critical assessment.
In conclusion, CEO succession is a sensitive issue that put a bank’s board, regulators (such as the CBN and NSE), employees, customers and other stakeholders on their feet.
So, in the choice of a CEO, it is important that the board of directors consider an individual with a wealth of experience in the banking industry, intellect, and understanding of how the various functions of the bank are intertwined to boost the bank’s revenue and achieve measurable results.
The incoming CEOs must be able to create a strategic direction to take the bank forward within the next 4 or 5 years and build on the sterling performance of the previous administration.