BoN sets limit on board tenures, age limits for Directors

A limit on the number of boards an individual can serve has now been passed by the Bank of Namibia, and the age limit for independent Directors and Chairpersons is 70, an announcement was made today.

The bank today announced it has issued a revamped Determination on the Appointment, Duties, and Responsibilities of Directors, Principal Officers, and Executive Officers of Banking Institutions and Controlling Companies to improve the corporate governance of banking institutions.

The central Bank’s Director for Strategic Communications and International Relations Kazembire Zemburuka said it’s the first time the bank has set limits on the number of years a director may serve on the board.

“In this regard, board members may only serve for a maximum of ten years on a board of a banking institution, with exceptions considered on a case-by-case basis. An independent Director including the Chairperson of the Board of Directors can only serve on the board till they are 70 years of age, in line with best practice.

“Limits have also been set regarding the number of boards a board member may serve to ensure that they apply themselves entirely to their fiduciary duties and complex responsibilities associated with banking institutions. In terms of the Determination, a prospective board member at a banking institution or controlling company may not serve on more than two boards at a time,” he said.

Zemburuka added that exceptions will be made for directors who are not in full-time employment or who serve on boards of a banking institution, the banking group, the controlling company or holding company and any subsidiary belonging to the same group which will be counted as one and educational institutions and other similar bodies.

According to the bank the revised Determination which is effective as of December 16 2022, will serve as the foundation for sound corporate governance in banking institutions and controlling corporations charged with the social contract of safeguarding public deposits, protecting consumers, and providing access to credit – the fuel that powers the economy.

“The new Determination introduces best corporate governance practices, emphasising effective succession planning, skills development, and competencies for those tasked with the leadership of financial institutions.

The Determination puts rules in place for banking institutions to attract and retain top- tier business executives and seasoned experts to provide the necessary oversight and help develop and guide the execution of business strategies of banking institutions,” he added.

By Observer