The United Bank for Africa (UBA) Plc will today (Friday), name a successor for Tony Elumelu, its incumbent managing director/chief executive. This is in compliance with Tuesday's policy pronouncement by the Central Bank of Nigeria, which capped CEOs' tenure at 10 years.
The announcement of Mr. Elumelu's successor is also in fulfilment of the UBA Board's promise in an advertorial in major national newspapers yesterday (Thursday) that it is "prepared to meet the new requirements." Although the bank was still keeping the identity of the new helmsman close to its chest at the time of filing this report, a top management source confided in NEXT that "the announcement will be made tomorrow by 9am, after the board's meeting." Apart from being the first of the three banks to be immediately affected by the July 31 deadline, whose incumbent CEOs have attained the statutory 10 years to vacate their offices and name a successor, UBA is also the first to fully comply with the new CBN directive on banks' CEOs tenure without much fuss.
While UBA is taking proactive measures to ensure that there is no dislocation in any area of its operations on account of the latest directive, other affected banks, namely, Zenith Bank Plc and Skye Bank Plc are still struggling to come to terms with the new CBN directive, and are yet to make official comments on the issue.
UBA Board's assurance
The board, in the paid advertorial, admitted that the new guidelines, which limit the tenure of banks' CEOs to a maximum of 10 years inclusive of the years served in a pre-merger component bank, affected Mr. Elumelu, its Group Managing Director/CEO.
The advertorial read in part, "By the new (CBN) guidelines, the positions of the CEOs of some banks including that of UBA will be affected" because "all CEOs who would have served for 10 years by July 31, 2010 are required to handover to their successors by August 01, 2010." The board went further to assure that "the implementation of the new guidelines will not alter the vision and plan of UBA, as the bank is well positioned to meet the requirements." This, the board asserted, is because "UBA has for a considerable period of time put strong emphasis on ensuring that it nurtures a deep pool of senior management talent, largely developed internally and complemented by selective recruitments from global institutions, capable of guiding the bank. The bank has in place robust business continuity and succession plans."
Mr. Elumelu was the managing director of the defunct Standard Trust Bank (STB) in 1995, before he became the head of UBA in 2004, following the merger of the two banks.
Other affected banks
Meanwhile, Jim Ovia's Zenith Bank and Akinsola Akinfemiwa's Skye Bank, the two other banks whose chief executives will be affected by the new directive are still not saying much, while they continue the search for successors.
The word is, in fact, mum at Zenith, as even our NEXT reporter was rebuffed when she visited the corporate headquarters of the bank on Ajose Adeogun Street, in Victoria Island.
However, a source at Skye Bank, who pleaded anonymity, said as an operator, the bank cannot comment on regulations, but said, "We (Skye Bank) would issue an official press statement on this in due time."
Commenting on the new CBN's directive, Olufemi Awoyemi, Managing Director/Chief Executive Officer of Proshare Nigeria Limited, said the banks whose CEOs are affected have produced competent hands managing other financial institutions including those serving in government, as is the case with Remi Babalola, ex-Zenith Bank General Manager, now Minister of State for Finance.
"The CBN found UBA Plc worthy enough to take at least five of its people to serve as executive directors and CEO in the rescued banks. The industry cannot be said to have an immediate capacity problem and operators should, therefore, not be in a panic mood," he reassured.
Mr. Awoyemi, supporting the new CEOs tenure, argued that this has become imperative in view of the fact that some of the banks CEOs "have, through their conducts, given the public and regulators sufficient reasons to doubt their ability to stay above board in decision making, either as a matter of cultural influence or personal ego."
Pros and cons
Tope Fasua, Managing Director of Global Analytic Consulting Limited, said the issue of tenure for bank chief executives has its pros and cons.
On one hand, Mr. Fasua described the decision as good, as it will discourage ‘sit-tight chief executives" as well as help establish corporate governance in the affairs of the banks.
But on the other hand, he said the decision might encourage corruption on the part of the incumbent CEOs, who might be tempted to indulge in corrupt practices on account of their limited tenure in office.
Additional reporting by Bassey Udo and Oluwaseyi Bangudu