Governor of the Central Bank of Nigeria, Olayemi Cardoso, has issued a strong warning to bank directors and corporate leaders, declaring that governance failures in Nigeria’s financial system will no longer be tolerated as the country transitions into a post-recapitalisation era.
Speaking at the induction ceremony of new members of the Chartered Institute of Directors Nigeria in Lagos, Cardoso described the recent banking recapitalisation exercise as more than a regulatory requirement, calling it a strategic move to build stronger institutions, restore investor confidence, and support long-term economic growth.
He said the next phase of reforms would be anchored on three pillars: consolidation, confidence, and stability, stressing that directors now carry greater responsibility to ensure institutions are not only profitable but also transparent, well-governed, and resilient.
“Nigeria’s financial sector has just completed a historic recapitalisation exercise. This reform was not simply a regulatory requirement, it was a strategic imperative to strengthen resilience, enhance investor confidence, and ensure that our institutions are positioned to support sustainable economic growth,” Cardoso said.
He emphasised that stewardship in the new era requires directors to move beyond ceremonial roles and act as active guardians of institutional integrity. According to him, boards must guide institutions through economic cycles, support restructuring when necessary, and embed robust risk management systems.
“This era calls for directors who are not passive overseers but active stewards, leaders who balance profitability with sustainability, and compliance with innovation,” he added.
Cardoso recalled that Nigeria’s banking sector has historically suffered from weak corporate governance, insider abuses, and poor oversight, often requiring regulatory intervention. He cited the January 2024 dissolution of boards and management of three banks due to serious governance lapses.
He also referenced a 2025 directive mandating systemically important banks to obtain approval for new chief executives six months before leadership transitions, with public announcements required three months in advance to prevent uncertainty and preserve market confidence.
“These recent actions echo earlier interventions, including those of 2009, when insider lending and weak board oversight led to collapse. The lesson is clear: strong governance is the foundation of trust and stability in the financial system,” he said.
The CBN governor noted that recapitalisation has been reinforced with sweeping governance reforms, including stricter insider credit limits, revised corporate governance guidelines, fit-and-proper tests for directors, enhanced disclosures, annual board evaluations, and structured succession planning.
He added that the end of regulatory forbearance and the introduction of Risk-Based Capital Requirements signal a major shift in supervision, where banks will be assessed not just by size but by how well their capital aligns with underlying risks.
“Capital adequacy is no longer about size alone; it is about risk alignment,” he stated.
Cardoso warned that reckless lending, excessive risk exposure, and weak internal controls would have no place under the new regime, noting that the reforms are expected to extend beyond banking to raise governance standards across Nigeria’s broader corporate sector.
He urged over 300 newly inducted members to view their roles as a call to national service, emphasising the influence of boardroom decisions on the country’s economic future.
“The choices you make in boardrooms will shape the future of Nigeria’s economy,” he said.
Cardoso reaffirmed the Central Bank’s commitment to engaging stakeholders and providing regulatory clarity, stressing that collaboration between regulators and corporate boards remains essential to building a resilient, inclusive, and globally competitive financial system.
“As we move forward in this new era, let us remember that stewardship is not optional, it is the essence of leadership,” he said, adding that consolidation, confidence, and stability must guide corporate decision-making to sustain long-term economic strength.
