This is a career path in Nigerian finance that everyone can describe, and almost no one examines.
I want to discuss this carefully, because the easy version of the argument is unfair. The people who make this move are often the most qualified directors available; they know the rules because they wrote them and they understand systemic risk because they managed it; any serious board would want that expertise, and the individuals have every right to work after public service.
Nothing in what follows is an accusation against any person. I simply look at the governance strategy around these issues.
The problem is structural and runs in both directions. Looking backwards, the prospect of a future board seat is a quiet influence on a serving supervisor. No corrupt bargain is needed; rather, it is simply human to be gentler with the institutions that represent your future employment pool. The conflict does not require bad intent; it only requires the knowledge, held while supervising, that these same boardrooms are where supervisors eventually land.
Looking forward, a former supervisor on a board changes the relationship between the institution and its regulator. The board gains someone who knows how the examiner thinks, where discretion lives, and which former colleagues now review the file. That knowledge is precisely why the appointment is valuable and precisely why it should concern us. Regulatory insight, purchased through a board seat, is an asset to one institution and a quiet tax on the credibility of supervision for everyone else.
We already accept this logic elsewhere. Nigerian rules now impose cooling-off periods on executives before they can chair the companies they ran, because we recognise that proximity needs time to decay before oversight can be real. The same logic applies with more force to supervisors joining the supervised. If a CEO must wait years before chairing his own former company, on what principle does a supervisor move straight from examining an institution to sitting on its board?
I will be honest about the evidence, as always. I have not found a published, binding Nigerian cooling-off regime for regulators joining boards they once supervised. If one exists and has teeth, I welcome the correction, and the correction would itself be worth publicising. But if the answer is that no such rule exists, then we are relying on individual restraint to manage a structural conflict, and that has never been a governance strategy anywhere.
So the question: Should Nigeria have a mandatory cooling-off period between supervising an institution as a regulator and joining its board? And if the expertise argument is strong enough to justify the current practice, why does the same argument not apply to the executive-to-chair transition we already restrict?
Discover more from The Industry
Subscribe to get the latest posts sent to your email.
