The Securities and Exchange Commission (SEC) has introduced new corporate governance regulations that bar Chief Executive Officers (CEOs) from immediately assuming the role of board chairman within the same company or corporate group. A mandatory three-year “cooling-off” period must now be observed before such a transition. The directive, detailed in a circular titled *“Circular to All Public Companies and Capital Market Operators on the Transmutation of Independent Non-Executive Directors and Tenure of Directors”* and released on Saturday, also prohibits Independent Non-Executive Directors (INEDs) from taking up Executive Director positions within the same company or its group structure. According to the SEC, these reforms are designed to protect board independence and strengthen corporate governance practices within Nigeria’s capital market. “The Commission has observed a worrying trend of the transmutation of Independent Non-Executive Directors into Executive Directors, including the position of Chief Executive Officer,” the circular noted. “This practice compromises the neutrality and objectivity expected of INEDs and undermines the core principles of independent directorship as outlined in the National Code of Corporate Governance (NCCG) and the SEC Corporate Governance Guidelines (SCGG).” The SEC has therefore instructed all public companies and capital market operators to immediately halt the practice of converting Independent Non-Executive Directors (INEDs) into executive roles within the same company or its group. To enhance board transparency and prevent excessive concentration of authority, the Commission also introduced new rules on board succession, including tenure limits and transition restrictions. Specifically, the SEC mandated that Chief Executive Officers (CEOs) or Executive Directors who have served for 10 consecutive years in a single company—or 12 consecutive years across a group—must vacate their roles. Such individuals are barred from becoming Board Chairman of the same company or group until a mandatory three-year cooling-off period has passed. Even then, if appointed as Chairman, their term must not exceed four years. These measures, the SEC emphasized, are supported by its authority under Section 355(r)(iv) of the Investments and Securities Act (ISA), 2025, which empowers it to set corporate governance standards for regulated entities. “The directives take immediate effect and must be strictly adhered to. Public companies and capital market operators are required to integrate these rules into their board appointments and succession plans,” the SEC stated. The Commission also clarified that the years already served by current executives and directors will count toward the newly established 10- and 12-year tenure thresholds.