In a bold move likely to ruffle feathers in Nigeria’s startup and corporate boardrooms, the Securities and Exchange Commission (SEC) of Nigeria has announced sweeping new rules that directly curb the tenure and influence of company founders and directors — particularly those at the helm of capital market operators and publicly listed firms.
The Era of Perpetual Founders May Be Over
Under the new directive, public companies and “significant public interest” capital market operators are now bound by a hard ceiling: no director may serve more than 10 consecutive years within the same company — or 12 years across a group of related companies. If you thought your founder-CEO status guaranteed you a lifetime seat on the board (or perhaps a gentle shuffle into the chairman’s throne), think again. Nigeria’s SEC has introduced a firm three-year “cooling off” period before former CEOs or executive directors can become board chairs, and even then, only for a maximum of four years.
The move is not simply a matter of bureaucratic tidying. It’s a direct challenge to a pattern the Commission describes with barely concealed irritation: the rotation of directorships within the same inner circles — often from independent non-executive director (INED) to CEO or ED — within the same company or group. In other words: boards swapping wigs and titles among themselves, while continuing to sip from the same pot of influence.
In the SEC’s words, this “transmutation” erodes independence, undermines governance, and — if you read between the lines — makes a mockery of what “independent” actually means.
“Independent” Directors Who Morph Into Executives? SEC Says No More
This crackdown effectively torpedoes a widespread Nigerian corporate practice: appointing INEDs, only to later elevate them into executive roles, sometimes even CEO. While this tactic may have been born out of pragmatism (or a dearth of trusted talent, depending on whom you ask), it clearly violates the very logic of independent governance.
Both Nigeria’s National Code of Corporate Governance (NCCG) and the SEC Corporate Governance Guidelines (SCGG) stress independence as a cornerstone of fiduciary oversight. An INED-turned-CEO is, by definition, no longer independent — and the regulator has lost patience with the semantic gymnastics.
This intervention comes at a curious juncture. In February, Flutterwave — arguably Nigeria’s most visible fintech brand and still privately held — publicly declared its intention to list on the Nigerian Exchange (NGX), pivoting from its earlier ambitions of a U.S. IPO. CEO and co-founder Olugbenga “GB” Agboola delivered the news directly to President Bola Ahmed Tinubu, seeking political support for the move and reaffirming the company’s long-term commitment to Nigerian capital markets.
The optics of this are not lost on seasoned observers. While Agboola — who has been CEO since Flutterwave’s inception — may not be immediately affected by the SEC’s new rules (as the company is still private), a local listing would inevitably bring the firm within regulatory purview. The days of founders indefinitely holding both reins and gavel might well be numbered.
The Global Context: How Nigeria’s Rules Stack Up
Unlike Nigeria’s prescriptive approach, the UK’s Financial Conduct Authority (FCA) and US Securities and Exchange Commission (SEC) refrain from imposing hard limits on director tenure. Instead, they lean heavily on principles-based governance, requiring companies to disclose how they ensure board independence and effectiveness. In practice, many UK firms adopt a 9-year limit for INEDs, but this is not codified in statute. In the U.S., tenure is usually addressed through internal policies or shareholder activism — not regulatory fiat.
By contrast, Nigeria’s SEC is drawing a clear line in the sand. Its stance mirrors a broader trend among emerging markets: where governance lapses tend to be more systemic, regulatory intervention is more direct.
A Cultural Reset for Nigerian Boardrooms?
The implications are clear. Founders can no longer assume indefinite stewardship of the entities they birthed. Corporate succession in Nigeria will now require more than family-like loyalty or personal charisma. It demands foresight, structure, and humility — qualities not always abundant in ecosystems defined by founder mythology.
The SEC’s move is, in some sense, an institutional nudge for Nigeria’s corporate class to grow up — and grow out of themselves.
For some founders, this might feel like an unkind expiration date on their legacy. For investors, stakeholders, and the broader economy, it could be the beginning of more credible, accountable, and resilient corporate governance. One thing is certain: the clock is ticking. And some founders might now need to get used to wielding influence from the back row — or better yet, from outside the boardroom entirely.