Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, yesterday warned bank directors and industry leaders to strengthen corporate governance or face decisive regulatory action, declaring that “strong governance is the foundation of trust and stability in the financial system.”
He gave the warning in a keynote address at the Chartered Institute of Directors (CIoD) induction ceremony in Lagos.
Represented by the Director, Banking Supervision, CBN, Dr. Olubukola Akinwunmi, Cardoso stressed that the success of the recently concluded bank recapitalisation exercise would depend largely on the quality of leadership and oversight provided by directors.
According to him, “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.”
He, however, cautioned that recapitalisation alone is not sufficient, adding: “As we enter this new phase, the role of directors becomes even more critical. Stewardship must now be exercised with sharper focus on consolidation, confidence, and stability.”
Highlighting the consequences of weak governance, Cardoso said the apex bank would not hesitate to act where necessary.
“Over the years, Nigeria’s banking system has been repeatedly tested by failures of corporate governance,” he said, adding, “where governance fails, the regulator must act to safeguard depositors and the economy.”
He recalled recent interventions by the CBN, noting: “In January 2024, it dissolved the boards and management of three banks due to serious governance lapses and regulatory breaches,” stressing that such actions underscore the Bank’s zero tolerance for infractions.
Cardoso further declared that the new regulatory regime would demand higher levels of discipline from directors. “This era calls for directors who are not passive overseers but active stewards, leaders who balance profitability with sustainability, and compliance with innovation,” he said.
On new policy measures, he stated: “The adoption of Risk-Based Capital Requirements represents a cultural shift in our financial system. Capital adequacy is no longer about size alone; it is about risk alignment.
He elaborated: “For directors, this means strategic oversight, ensuring capital planning anticipates both current and emerging risks; strengthening frameworks for credit, market, and operational risk; and taking responsibility for compliance without reliance on regulatory forbearance.”
Cardoso emphasised that the apex bank had ended regulatory leniency, noting: “The end of forbearance signals a decisive shift towards stricter compliance with capital adequacy standards. Institutions must now align capital with their risk profile, ensuring resilience.”
Reinforcing his warning, he said: “These measures are not punitive, they are enabling. They provide directors with the framework to exercise stewardship with discipline, foresight, and confidence.”
