Cardoso To Bank Directors: Fix Governance Or Face CBN Action
Central Bank of Nigeria Governor Olayemi Cardoso has issued a firm warning to bank directors and industry leaders, declaring that the apex bank will take decisive regulatory action against any institution where corporate governance failures are identified.
Cardoso delivered the warning in a keynote address at the Chartered Institute of Directors induction ceremony in Lagos, where he was represented by the Director of Banking Supervision, Dr. Olubukola Akinwunmi.
Framing governance as non-negotiable, Cardoso stated: “Strong governance is the foundation of trust and stability in the financial system.”
The CBN governor tied the warning directly to the recently concluded bank recapitalisation exercise, describing it as more than a regulatory formality. “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 said.
He cautioned, however, that fresh capital alone cannot guarantee stability. “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,” Cardoso said.
Citing the consequences of poor oversight, he reminded his audience that Nigeria’s banking history carries costly lessons. “Over the years, Nigeria’s banking system has been repeatedly tested by failures of corporate governance,” he noted, adding that “where governance fails, the regulator must act to safeguard depositors and the economy.”
As evidence of the CBN’s resolve, Cardoso recalled that in January 2024, the apex bank dissolved the boards and management of three banks over serious governance lapses and regulatory breaches, describing the interventions as a demonstration of zero tolerance for infractions.
On the regulatory direction going forward, he announced an end to leniency. “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,” he said.
Addressing the adoption of Risk-Based Capital Requirements, Cardoso framed it as a cultural reset. “Capital adequacy is no longer about size alone; it is about risk alignment,” he stated, adding that directors must ensure capital planning anticipates both current and emerging risks while strengthening frameworks for credit, market, and operational risk.
He called for a new generation of proactive leadership within boardrooms. “This era calls for directors who are not passive overseers but active stewards — leaders who balance profitability with sustainability, and compliance with innovation.”
Cardoso concluded by reframing the regulatory measures as constructive rather than punitive. “These measures are not punitive; they are enabling. They provide directors with the framework to exercise stewardship with discipline, foresight, and confidence.”