The Securities and Exchange Commission’s (SEC) recent directive prohibiting Independent Non-Executive Directors (INEDs) from assuming executive roles within the same company or group structure has received support from key market stakeholders, particularly shareholders who view it as a step toward safeguarding boardroom neutrality and improving investor confidence. The directive, released on June 19, 2025, under the title “Circular to All Public Companies and Capital Market Operators on the Transmutation of Independent Non-Executive Directors and Tenure of Directors,” mandates the immediate discontinuance of converting INEDs to executive positions such as Chief Executive Officer or Executive Director. It also sets tenure limits of 10 consecutive years for directors within the same company and 12 years within the same group. Additionally, any former CEO or Executive Director must observe a three-year cooling-off period before taking up the role of Chairman, whose maximum tenure shall be four years. Analysts believe the move aligns with a growing global push for stricter board governance and a clearer separation between oversight and management functions. Managing Director and Chief Executive Officer of Arthur Stevens Asset Management, Olatunde Amolegbe, said the development was expected.

Sun