The Bank of Tanzania (BoT) has proposed regulations to limit the tenure of top executives and directors of banks and financial institutions to 10 years. The draft Banking and Financial Institutions (Corporate Governance) Regulations, 2026, aim to strengthen corporate governance and leadership succession in the banking sector. The proposed rules would bar a board member or chief executive officer (CEO) from holding office for more than 10 consecutive years.
The draft regulations also state that a person who has served for 10 consecutive years cannot return to the same institution until three years have elapsed. This move is expected to bring new energy and ideas into the banking industry. Analysts welcome the rules, saying the 10-year tenure limit could help in leadership succession and prevent familiarity and reduced exposure to new challenges.
The proposed regulations would also tighten several aspects of board governance. The minimum number of board members would rise from five to seven, while a majority would have to be non-executive. At least two-thirds of the non-executive directors would have to be independent and possess relevant expertise in areas including banking, finance, accounting, auditing, law, economics, cybersecurity, or information and communication technology.
The draft regulations expand the specified expertise of non-executive directors to include cybersecurity and information and communication technology, reflecting the increasing importance of technology and digital banking in the sector. The proposed rules also allow up to 75 percent of annual board meetings to be conducted through video conferencing, up from 25 percent previously.
Analysts have different views on the proposed 10-year tenure limit. Dr. Bupe Mwakyusa, a senior lecturer at the Institute of Finance Management, said a CEO who has achieved the institution's objectives after a decade could seek another challenge, including moving to another bank. Aziz Rashid, a financial analyst at Ardhi University, said the 10-year limit should be considered alongside the need to strengthen the efficiency and depth of Tanzania's banking sector.
Dr. Tobias Swai, a senior lecturer at the University of Dar es Salaam, said the 10-year limit could work effectively if banks put strong succession plans in place. He added that leadership transitions should not result in institutions losing knowledge and experience accumulated during a CEO's tenure. The proposed regulations are open for public comments, with the deadline set for October 28, 2026.
The Bank of Tanzania's proposed regulations aim to strengthen corporate governance and leadership succession in the banking sector. The rules would apply to all banks and financial institutions in Tanzania. The central bank's move is expected to promote a more efficient and competitive banking sector, which is essential for the country's economic growth.
Key points
- The proposed regulations would limit the tenure of top executives and directors of banks and financial institutions to 10 years.
- The draft regulations would also require banks to have a majority of non-executive directors with relevant expertise in areas such as banking, finance, and cybersecurity.
- The proposed rules are open for public comments, with the deadline set for October 28, 2026.
