Abuja, June 21, 2025 – The Securities and Exchange Commission (SEC) has issued a new corporate governance directive barring Chief Executive Officers (CEOs) and Executive Directors from immediately taking up the position of Board Chairman within the same company or group upon exiting their executive roles.
This directive, announced as part of the Commission’s continued efforts to strengthen transparency and uphold good governance practices in Nigeria’s capital market, is aimed at promoting checks and balances within corporate structures and discouraging the consolidation of influence within a single leadership cycle.
According to the SEC, the new rule seeks to ensure that boards maintain independence and that leadership transitions are conducted in a manner that enhances accountability and effective oversight. The Commission emphasized that immediate elevation of outgoing CEOs or executive directors to chairmanship positions often undermines the spirit of governance reforms, as it may hinder the autonomy and authority of new management teams.
The directive mandates a minimum cooling-off period before any such transition can occur, although the specific timeframe is expected to be detailed in the Commission’s forthcoming implementation guidelines.
Stakeholders in the financial and corporate sectors have welcomed the move as a bold and necessary step towards aligning Nigeria’s corporate governance standards with international best practices. Industry experts note that the directive could help foster stronger investor confidence, especially in publicly listed companies where the separation of powers is critical to board effectiveness.
The SEC has encouraged companies to begin reviewing their succession and board appointment plans to ensure compliance with the directive. It also stated that enforcement mechanisms would be put in place to monitor adherence and impose penalties for breaches.
This development marks a significant stride in Nigeria’s ongoing efforts to improve corporate accountability, protect shareholder interests, and foster a more transparent and resilient investment environment.
