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A sharp disagreement has ensued between the Central Bank of Nigeria (CBN) and First Bank of Nigeria over the removal of Dr Sola Adeduntan, managing director and chief executive officer of the bank (FirstBank).


Just yesterday, April 28 2021, the board of First Bank of Nigeria Limited announced the appointment of Mr Gbenga Shobo as managing director/chief executive officer with immediate effect in a statement issued by the bank’s chairman, Mrs Ibukun Awosika, thereby terminating the appointment of Dr Sola Adeduntan eight months before the expiration of his tenure.


Interestingly, this announcement by the bank has attracted reaction from the Central Bank of Nigeria (CBN), and in a letter to First Bank, Nigeria’s oldest bank, the CBN remarked, “The attention of the Central Bank of Nigeria (CBN) has been drawn to media reports that the Board of Directors has approved the removal of the current Managing Director of the bank, Dr. Sola Adeduntan, and appointed a successor to replace him. The CBN notes with concern that the action was taken without due consultation with the regulatory authorities, especially given the systemic importance of First Bank Ltd.”


Also, the apex bank said, “Given that the tenure of Dr. Adeduntan is yet to expire and the CBN was not aware of any report from the board indicting the managing director of any wrong-doing or misconduct, there appears to be no apparent justification for the precipitate removal.”


The apex bank also noted,  “We are particularly concerned because the action is coming at a time the CBN has provided various regulatory forbearances and liquidity support to reposition the bank which has enhanced its asset quality, capital adequacy and liquidity ratios amongst other prudential indicators. It is also curious to observe that the sudden removal of the MD/CEO was done about eight months to the expiry of his second tenure which is due on December 31, 2021. The removal of a sitting MD/CEO of a systemically important bank that has been under regulatory forbearance for 5 to 6 years without prior consultation and justifiable basis has dire implications for the bank and also portends significant risks to the stability of the financial system.”


The CBN said, “In light of the foregoing, you are required to explain why disciplinary action should not be taken against the board for hastily removing the MD/CEO and failing to give prior notice to the CBN before announcing the management change in the media.”


However, informed source from the bank said First Bank has a maximum six years tenure for its MD/CEO in line with its succession plan and also the removal of Dr Adeduntan does not exceed CBNs maximum of 10 years tenure. The source claimed that the reaction of the CBN is tantamount to interference in the internal affairs of the bank and its succession plan which it has followed judiciously over the years.


“First Bank followed its corporate governance framework in its change of leadership and appointment of new executive directors. No managing director in the 127 years history of First Bank has ever attempted a tenure extension. Why now?”  the source said.


Another source who craves anonymity said the tenure of Adeduntan ends formally in June this year after spending two terms of three years each, saying that leaving early is in line with the bank’s tradition:


“Adeduntan’s term formally ends in June this year after two terms of three years each, adding that leaving early is in line with the bank’s succession plan. When he was appointed six years ago and a DMD role was created, the erstwhile First Bank’s Managing Director knew the DMD would succeed him and this is what has happened. This is corporate governance at its best,” the source said.





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