Unlike in the past when banks were solely left to take decisions concerning the appointment of senior management officers, the Central Bank of Nigeria (CBN) Wednesday said such appointments would now be subject to its approval.

The Deputy Governor, Financial System Stability, CBN, Dr. Kingsley Moghalu, dropped this hint at a conference titled: "Risk Governance for Boards of Directors and Senior Managers," organised by the Global Association of Risk Professionals (GARP) and the AME& T Group in Lagos .

He declared that the move was part of the apex bank's efforts aimed at strengthening the risk management framework in banks. According to Moghalu, appointment of key senior management officers such as Chief Risk Officers, Head of Information Technology, Treasury and Operations, would now be subject to the apex bank's approval.

Moghalu explained: "We have to look at all that before such appointment would be approved. There are a number of positions you cannot hold in banks without meeting very clear thresholds that would be set up by the CBN. We now think there is need to look at some functions that traditionally have not been looked at.

"These include roles such as the Risk Management functions, the Information Technology, Treasury, Operations. So we are reviewing the requirements for appointments to these types of positions in banks. Those thresholds must be met before the CBN would give its permission for such appointments to become substantive."

In addition to that, the Deputy Governor also stressed that the banking watchdog would continue to ensure that it scrutinises the qualification of directors of banks, saying that it now pays special attention to fitness of character in such appointments.

"We have to look at their experience level. Every Director must not be an expert in finance, but to an extent, it is important that they should be open to learning by having other types of qualifications and make it clear that they can be trained. Because to be a Director in a bank now is much more than attending board meetings four times a year. Recent activities and recent banking crisis have shown that the responsibilities of the board of Directors of banks are huge," he added.

Earlier in his keynote address titled: "Risk-Intelligent Governance: Leading Risk Management in Organisations," Moghalu said that the effectiveness of risk governance in banks largely depends on the integrity of board of directors, their 'risk intelligence", as well as their education.
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He charged directors of banks to ensure that they provide risk oversight and make risk management a priority for the executive team by providing insights and feedbacks to support strategic decision-making in their institutions.

Moghalu explained that the cancellation of the Universal Banking model was also part of efforts by the regulator to disaggregate banks' risk and also reduce their risk profile.

"The era of considering risk governance as the exclusive preserve of senior management is over. Boards of directors of companies, particularly financial institutions now have no option than to be actively involved in risk governance and ensure that risks are evaluated in the appropriate strategic context. The board must set direction and tone at the top so as to ensure that the required risk culture cascades down the entire organisational hierarchy," he said.