The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has issued a firm warning to bank directors and industry leaders, urging them to reinforce corporate governance standards or face strict regulatory consequences.

He delivered the message in a keynote address at the Chartered Institute of Directors (CIoD) induction ceremony in Lagos, where he emphasised that sound governance remains essential to maintaining trust and stability within the financial system.

Represented by the CBN Director of Banking Supervision, Dr. Olubukola Akinwunmi, Cardoso noted that the success of the recently completed bank recapitalisation exercise would depend heavily on the quality of leadership and oversight provided by directors.

He described the recapitalisation as more than a routine regulatory step, calling it a strategic move aimed at strengthening the sector’s resilience, boosting investor confidence, and positioning financial institutions to support long-term economic growth.

However, he stressed that recapitalisation alone would not 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,” he said.

Cardoso warned that the CBN would not hesitate to step in where governance standards fall short, recalling that weaknesses in corporate governance have historically posed risks to Nigeria’s banking sector.

“Where governance fails, the regulator must act to safeguard depositors and the economy,” he stated.

He pointed to recent actions taken by the apex bank, including the dissolution of the boards and management of three banks in January 2024 over serious governance breaches, describing such interventions as evidence of the CBN’s zero tolerance for infractions.

Looking ahead, Cardoso said the evolving regulatory environment would demand greater accountability and active involvement from directors.

“This era calls for directors who are not passive overseers but active stewards—leaders who balance profitability with sustainability, and compliance with innovation,” he said.

He also highlighted the introduction of Risk-Based Capital Requirements, describing it as a significant shift in how financial institutions approach capital adequacy.

According to him, capital strength will no longer be measured solely by size but by how well it aligns with risk exposure.

For directors, this means ensuring effective capital planning that anticipates both current and emerging risks, strengthening risk management frameworks, and taking full responsibility for compliance without depending on regulatory leniency.

Cardoso made it clear that the era of forbearance has ended, noting that institutions must now strictly adhere to capital adequacy standards while aligning their capital base with their risk profiles.

“These measures are not punitive—they are enabling. They provide directors with the framework to exercise stewardship with discipline, foresight, and confidence,” he added.