KEY POINTS
- CBN Governor Olayemi Cardoso has warned bank directors to strengthen corporate governance or face decisive regulatory action.
- Cardoso said the success of the recently concluded bank recapitalization will hinge on the quality of director leadership.
- The CBN has ended regulatory forbearance and will enforce risk-based capital requirements without leniency.
Olayemi Cardoso, the governor of the Central Bank of Nigeria, has put the country’s bank directors on notice. He said they must strengthen corporate governance or face decisive regulatory action, declaring that strong governance is the foundation of trust and stability in the financial system.
Cardoso made the call in a keynote address at the Chartered Institute of Directors induction ceremony in Lagos on Sunday. Olubukola Akinwunmi, the CBN’s director of banking supervision, represented the governor at the event.
Recapitalization is only the start
Specifically, Cardoso said the success of the recently completed bank recapitalization exercise will hinge on the quality of leadership and oversight that directors provide. He framed the reform as a strategic imperative rather than a regulatory tick-box.
“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.
Furthermore, the governor cautioned that recapitalization alone will not deliver the outcome the country needs. He said directors must shift their focus to consolidation, confidence and stability.
A history of governance failures
Notably, Cardoso pointed to recurring failures in Nigeria’s banking history. He recalled that in January 2024, the apex bank dissolved the boards and management of three banks over serious governance lapses and regulatory breaches.
“Over the years, Nigeria’s banking system has been repeatedly tested by failures of corporate governance. Where governance fails, the regulator must act to safeguard depositors and the economy,” he said.
Specifically, Cardoso said the apex bank holds zero tolerance for infractions. He told directors that the era of passive oversight is over and the new regulatory regime demands sharper discipline.
Active stewardship, not box-ticking
“This era calls for directors who are not passive overseers but active stewards, leaders who balance profitability with sustainability, and compliance with innovation,” Cardoso said.
Additionally, the governor introduced the new Risk-Based Capital Requirements as a cultural shift in Nigeria’s financial system. He said capital adequacy is no longer about size alone but about how well capital aligns with risk.
Crucially, the framework demands that directors handle strategic oversight on capital planning that anticipates current and emerging risks. They must also strengthen frameworks for credit, market and operational risk and take responsibility for compliance without leaning on regulatory forbearance.
End of the leniency era
Meanwhile, Cardoso made it clear that the CBN has retired regulatory leniency. The end of forbearance, he said, signals a decisive shift toward stricter compliance with capital adequacy standards. Institutions must now align capital with their risk profile to ensure resilience.
With recapitalization done and forbearance gone, Nigerian banks are entering a phase where leadership quality, not capital cushions, will determine who thrives. Notably, Cardoso framed the new regime as enabling rather than punitive, giving directors a framework to exercise stewardship with discipline, foresight and confidence. The next test is whether bank boards take the message to heart before the regulator forces the issue.
