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THE CENTRAL BANK OF NIGERIA (CBN) COMPETENCY FRAMEWORK

FOR THE NIGERIAN BANKING INDUSTRY: A CASE OF “NEAR”

ADEQUACY?

Introduction

The Central Bank of Nigeria (CBN) issued the competency framework for the

Nigerian banking industry in November 2012 and it came into full effect from

November 2014.1 The framework is detailed in its presentation of requisite

qualifications and skills for officers in the banking industry. Under the framework,

jobs in the banking industry are classified into roles and controlled functions, with a

list of controlled functions and categories provided.2 Section 4 provides for an

approved persons regime, indicating that officers of the ranking of Assistant General

Manager and above, along with persons who occupy key positions with significant

impact on the resources and operations of a bank will be approved for appointment in

line with the assessment criteria issued and reviewed from time to time by the CBN.3

A code of practice is provided for under section 5 and it states that an approved

person performing a controlled function must act with integrity, due skill, care and

diligence.4 The framework also provides for a structured generic and role specific

training and certification process that enable a reliable and objective assessment of an

employee’s competence and ability to perform adequately and consistently on a job

over time.5

In the framework policy document, it is stated that the last global financial crisis

evidenced the inadequacy of skills and executive capacity in the banking industry

which manifested in issues such as poor understanding of banking operations and

regulations, unethical conduct and unprofessional practices, poor risk management

and ineffective corporate governance.6 Reasons provided for these inadequacies

include the lack of training, certification, accreditation and competency standard for

1 See the framework at http://www.cenbank.org/Out/2012/CCD/Competency%20Framework.pdf (accessed 1st May 2015).2 Ibid, sec 3.03 Ibid, sec 4.14 Ibid, sec 5.15 Ibid, sec 6.26 Ibid, sec 1.0

http://www.cenbank.org/Out/2012/CCD/Competency%20Framework.pdf

the industry. The policy initiative is therefore aimed at developing a competency

standard, recognising the need for banks to accord priority to the continuous

enhancement of human capital. The availability of competent human resources is

viewed as a critical factor in enhancing effectiveness in the banking sector. The

objectives of the competency framework include, amongst other issues, to define the

minimum knowledge, skills and competencies needed for operators and regulators to

perform optimally in their roles.7 In this article, the aim is to discuss the CBN

competency framework, analysing its prospects at solving the problems of

incompetency in the human capital of banks and determining whether the framework

addresses all that it should in that regard. At first glance, it appears as though the

framework has taken account of all the issues which are likely to contribute to the

creation of a cohort of qualified and competent banking industry human resources.

However, upon a closer analysis, it becomes evident that the framework omits the

issue of personality, a critical aspect of individuality which impacts on the overall

ability to attain effectiveness in any of the roles it considers.

The article is structured as follows: The first section deals with the issue of

personality, competency and the framework, highlighting the relevance of personality

and behaviour, as well as their impact on an individual’s ability to be competent.

Section two analyses the CBN competency framework and presents a highlight of its

core initiatives and how they serve to achieve its objectives. The third section

presents arguments regarding the need to incorporate personality assessment into the

competency framework. It discusses personality issues in greater detail and their

impact on the ability of an individual to perform effectively. It is also indicated that

the conscientious personality dimension is, at the least, a requisite personality

dimension which can aid the achievement of the objectives of the competency

framework. In conclusion, it is reiterated that the framework has indeed provided a

standard as regards knowledge, skills and experience issues as it relates to officers

working in the Nigerian banking industry. However, in relation to overall

competency and ensuring that effectiveness is achieved, the CBN framework has not

taken cognisance of personality issues and is therefore limited in its adequacy as

regards defining and providing for minimum standards of competence.

Personality, Competency and the Framework7 Ibid, sec 2.0

The starting point in assessing how the framework addresses competency issues is an

adoption of the definition of competency as the ability to perform effectively.8 Being

competent as regards a job function would certainly involve possessing requisite

knowledge and skills. However, the manner in which these attributes are deployed to

the job in question and whether they are utilised in an effective way is predominantly

influenced by an individual’s behaviour.9 It is established in psychology research that

behaviour is significantly influenced by personality or personal characteristics.10 The

Nigerian Corporate Governance Code also recognises that certain personal

characteristics are required for effective governance, in addition to knowledge, skills

and experience.11 Most of the major corporate failures that occurred in the UK, US

and Nigeria had inappropriate behavioural issues as contributory elements.12 Some of

the corporate officers who were responsible for actions and decisions which led to

these failures may have possessed the requisite knowledge, skill and experience

needed for their job, but, the events that contributed to the failures bothered on their

actual behaviour. Therefore, a framework which is aimed at improving effectiveness

in human capital but ignores the critical aspect of individual personality and its

contributions to governance outcomes is somewhat deficient. In order to acquire an

all-encompassing picture of an individual’s ability to perform effectively in a given

role, it is necessary to determine whether his/her personality supports such ability. It

is simply not enough to outline the ideal behavioural patterns expected of such a

person in a code of practice without considering the question of whether the

individual possesses the requisite ability to produce such behaviours. It could be

argued that individuals are expected to learn acceptable modes of behaviour, but,

there is the dominant school of thought that suggests that personality which influences

8 See the Oxford Dictionary http://oxforddictionaries.com/definition/english/competence (accessed 1st May 2015).9 See J.R. Graham, C.R. Harvey & M. Puri, ‘Managerial Attitudes and Corporate Actions’ (2010) available at SSRN http://ssrn.com/abstract=1432641 (accessed 1st May 2015), where it is argued that personality traits certainly affect corporate actions.10See E.J.Phares, Introduction to Psychology (3rd ed., New York: Harper Collins Publishers 1991) 4, where it is stated that personality is that pattern of characteristic thoughts, feelings and behaviour that distinguishes one person from another and that persists over time and situations; see also D. Schultz & S.E. Schultz, Theories of Personality (5th ed., Pacific Grove, CT: Books/Cole Publishing 1994) where it is stated that personality is the unique, relative enduring internal and external aspects of a person’s character that influence behaviour in different situations. 11 See sec 4.4 of the SEC Code of Corporate Governance 2011 http://www.sec.gov.ng/code-of-corporate-governance-.html (accessed 1st May 2015).12 The corporate failures of the Maxwell Group and RBS in the UK, Enron and Lehman Brothers in the US and Oceanic Bank and Intercontinental Bank in Nigeria are clear examples.

http://www.sec.gov.ng/code-of-corporate-governance-.html

http://www.sec.gov.ng/code-of-corporate-governance-.html

http://ssrn.com/abstract=1432641

http://oxforddictionaries.com/definition/english/competence

behaviour is relatively stable and constant over time.13 In other words, a person is

usually of a certain personality over the course of a lifetime, and knowledge of that is

essential to determining how effective a code of practice would be.

Evidence of past experiences might duly indicate a capability to act with integrity;

however, it will not provide a more reasonable assumption as to the ability to

continually act with integrity more than a personality test which indicates a personal

characteristic of integrity. As the Nigerian corporate governance code has alluded to

the necessity to have persons of upright personal characteristics in the management of

companies, then if a framework is being developed to enhance effectiveness in

corporate management, it should take cognisance of the personality factor. This

article argues that the competency framework has omitted an essential determinant

and facilitator of effectiveness. It has no doubt provided a necessary standard of

qualifications and skills. But, it might be the case that after the implementation of

these standards, corporate failures still occur as a result of behavioural issues which

are dependent on personality. It would be pertinent to incorporate personality

requirements and tests in such a competency framework. Over time, there can then be

the hope of establishing a human resources base for the banking industry which

possesses the requisite knowledge, skills, experience and personal characteristic for

effective corporate governance. Requiring that individuals should act with integrity is

merely stating the ideal, however, regulatory intervention is needed in order to ensure

that people actually act with integrity. This could be done by specifying sanctions for

deviation from the norms, but, a more proactive approach which also serves to

prevent failures is to ensure as reasonably as possible that these individuals who are

involved in corporate management especially in companies such as those in the

financial services sector are persons who actually have the ability to act with integrity.

Ex ante mechanisms would arguably work better than ex post interventions because

they prevent the occurrence of failures. As regards personality tests, psychology

research provides a model for personality identification. The Five-Factor Model of

personality has proven robust against scrutinized empirical testing and has provided a

valid model for understanding personality.14 The model provides the most widely

used and empirically supported structure for describing individual differences in total 13 See note 9.14 See P. Hartmann, ‘The Five-Factor Model: Psychometric, Biological and Practical Perspectives’ (2006) 58(2) Nordic Psychology 150-170.

behaviour.15 The five dimensions of personality traits are (i) Neuroticism versus

Emotional Stability (ii) Extraversion (iii) Openness to Experience or Intellect,

Imagination or Culture (iv) Agreeableness versus Antagonism (v) Conscientiousness

or Will to Achieve.16 The NEO Personality Inventory (NEO-PI) and the NEO

Personality Inventory Revised (NEO PI-R) were developed to operationalize the Five-

Factor Model.17

In relation to leadership and job performance roles, there is enormous indication that

certain personality dimensions are better suited to creating effectiveness than others.18

The conscientious personality has proven to be a valid and stable predictor of both

leadership and performance roles.19 The other positive personality dimensions are of

importance no doubt, but, as regards goal directed tasks such as corporate governance,

the most vital personality dimension would be conscientiousness.20 More importantly,

as there is evidence to support the fact that some major corporate failures occurred as

a result of disobedience to established principles and regulations,21 and conscientious

personalities are more likely than not to be dutiful by obeying principles and

regulations, having conscientious personalities involved the governance of companies

would increase the likelihood of obedience to principles and regulations, thereby

preventing the kind of corporate failures that can occur for reasons of disobedience.

Particularly in the case of the Nigerian banking industry where past failures have been

15 See R. McCrae & O. John, ‘An Introduction to the Five-Factor Model and Its Applications’ (1992) 60 Journal of Personality 175-215.16 See R. McCrae & P.T. Costa Jr., ‘Personality Trait Structure as a Human Universal’ (1997) 52(5) American Psychologist 509-516; see also S.V. Paunonen & M.C. Ashton, ‘Big Five Factors and Facets and the Prediction of Behaviour’ (2001) 81(3) Journal of Personality and Social Psychology 524-539.17 See P.T. Costa & R.R. McCrae, Revised NEO Personality Inventory (NEO PI-R) and NEO Five-Factor Inventory (NEO FFI) Professional Manual (Odessa, FL: Psychological Assessment Resources Inc. 1992); see also R.R. McCrae & P.T. Costa, NEO Inventories: Professional Manual (Lutz, FL: Psychological Assessment Resources Inc. 2010); see also In-Sue Oh, G. Wang & M.K. Mount, ‘Validity of Observer Ratings of the Five-Factor Model of Personality Traits: A Meta-Analysis’ (2011) 96(4) Journal of Applied Psychology 762-773.18 See T.A. Judge, J.E. Bono, R. Ilies & M.W. Gerhardt, ‘Personality and Leadership: A Qualitative and Quantitative Review’ (2002) 87(4) Journal of Applied Psychology 765-780; see also G.M. Hurtz & J.J. Donovan, ‘Personality and Job Performance: The Big Five Revisited’ (2000) 85(6) Journal of Applied Psychology 869-879; see also M.K. Mount & M.R. Barrick, ‘The Big Five Personality Dimensions: Implications for Research and Practice in Human Resources Management’ in K.M. Rowland & G. Ferris (eds.), Research in Personnel and Human Resources Management, Vol 13 (Greenwich, CT: JAI Press 1995)153-200.19 See Judge et al (ibid); see also Hurtz & Donovan (ibid). 20 See Hurtz & Donovan , note 18; see also G. Abatecola, G. Mandarelli & S. Poggesi, ‘The Personality Factor: How Top Management Teams Make Decisions-A Literature Review’ (29th October 2011), Journal of Management and Governance, DOI 10/1007/s10997-011-9189-y (Online First publication).21 See for instance the Enron, Lehman Brothers, Oceanic Bank and Intercontinental Bank failures.

attributable to issues such as corruption and disobedience to rules and regulations, it is

argued that a high level of the conscientious personality dimension should be a

requisite personality trait in the quest to achieve effectiveness in leadership and

performance roles in the banking sector. Personality is argued to contribute to

competence as it contributes significantly to the ability of an individual to be

effective.

The Competency Framework

A main objective of the CBN framework is to define the minimum standards of

competencies required for optimal performance in the financial services industry. The

critical question, though, is whether it actually achieves this aim. In analysing the

framework, emphasis will be placed on the governing functions which essentially

dictate the tone downwards in an organisation. These functions include those of the

chairman, managing director (CEO), deputy managing director, executive directors

and non-executive directors. Other management levels and consequently other

employees are accustomed to acting on the directions of the persons in these roles,

which renders these roles most important for ensuring overall effectiveness. The

following table presents a highlight of the competencies specified for these roles

under the framework:

Governing Function Competencies

Chairman Good understanding of the role of

board chairman

Ability to operate effectively in such

a role

Relevant financial industry

experience

Experience of Nigerian boardroom

and corporate governance issues

Leadership/influencing skills

Analytical/problem solving skills

Entrepreneurship skills

Inter-personal relationship skills

Self-management skills

Managing Director- CEO Knowledge and understanding of the

Nigerian banking market

Strong strategic orientation

Excellent customer relationship skills

Negotiation, problem-solving and

conflict resolution skills

Creativity and innovation skills

Good product development and

portfolio management capabilities

Ability to network

Knowledge of risk management

Leadership, managerial and

administrative skills


Analytical and problem solving skills



Deputy Managing Director- DMD Knowledge and understanding of the









Ability to network







Executive Directors Knowledge and understanding of the


Knowledge and understanding

required for specific responsibilities








Ability to network







Non-Executive Directors Broad experience

Integrity and credibility

Proven skills and competencies in

their various fields

Knowledge of the operations of the

financial services industry

Knowledge of relevant laws and

regulations guiding operations in the

financial services industry

Ability to make meaningful

contributions to board deliberations







In analysing the competences specified in the framework, the aim is to discuss the

exceptions, because therein lies the arguments for lack of adequacy of the framework.

A few issues emerge from the competencies highlighted.

1) Integrity and Credibility: This is recommended only in relation to the role of

non-executive directors. It might be argued that the underlying reason for

expecting non-executive directors to have such competencies is because their

role is largely that of oversight. However, considering the connotations of the

word integrity which refers to the quality of being honest and able to adhere to

moral and ethical principles; and the word credibility which means the

capability to be believable and trustworthy; it becomes evident that these

competencies are indeed necessary for every person undertaking a governance

function. An important question then arises in relation to ascertaining that

persons in governance roles can and do indeed possess these competencies.

2) Knowledge of risk management: Risk management is the human activity

which integrates the recognition and identification of risk, assessment of risk,

developing strategies to manage risk and mitigation of risk using managerial

resources.22 Risk management enables company management to deal

effectively with identifiable events that can have an adverse effect on the

company.23 Entrepreneurial endeavour is an exercise which involves elements

22 See R.C. Agrawal, Risk Management (Jaipur, India: Global Media 2009); see also P. O’Reilly, Harnessing the Unicorn: How to Create Opportunity and Manage Risk (London: Gower Publishing Ltd 1998); see also A.E. Waring and A.I. Glendon, Managing Risk (London: International Thompson Business Press 1998). 23 See C. Van der Elst and M. Van Daelen, ‘Risk Management in European and American Corporate Law’, 2009 ECGI Working Paper no 122/2009 http://ssrn.com/abstract=1399647 (accessed 1st May 2015).

http://ssrn.com/abstract=1399647

of risk. It has also been argued that risk is inherent in business.24 Every

governance role involves some level of entrepreneurship and management

function; therefore, it is critical that any person undertaking these roles should

have knowledge of risk management. The CBN framework specifies this

competency as required only for the Managing Director/CEO. It is

particularly interesting to note that the CBN framework does not include this

competency for the role of the Deputy Managing Director (DMD), even when

it specifies expressly that the DMD is to take up the role of CEO in his/her

absence. These are precisely the kind of circumstances that create loopholes

for corporate failures, because for instance, in a situation where the CEO is

made to become absent on a short notice and the DMD steps into that role and

is faced with risk management decisions and has no clue as to how to engage

with the issues, chances become very high that wrong decisions will be made.

One wonders whether the intention of the framers of the framework is that the

DMD will suddenly acquire the requisite knowledge as and when he is made

to stand in for the CEO. Arguably, it is better that the knowledge of risk

management is inherent and there is the ability to apply it when necessary.

The same argument can be made in regard to the other governance roles.

3) Ability to perform effectively: This competency is specified only in relation

to the role of Chairman. Again, it is arguable that every governance role

requires the ability for effective performance. The objectives of the

competency framework as enumerated under Section 2.0 are essentially to

enhance effectiveness. The competencies specified for each role is aimed at

aiding the effective performance of the functions associated with the roles. An

important and relevant aspect of determining the ability to be effective is an

evaluation of personality which is a determinant factor in eventual behaviour.

If the aim of the framework is to help achieve success in relation to the

governance of banks, each person in a governance role being expected to

achieve the desired result in relation to his/her role, it becomes necessary to

address and provide for all the determinants of effectiveness. Knowledge and

skill which are relevant to the performance of each role is definitely necessary,

24 See D.W. Hubbard, The Failure of Risk Management: Why it’s Broken and How to Fix it (Hoboken, New Jersey: John Wiley & Sons 2009).

however, overall effectiveness will be impacted by behaviour, of which

personality is a significant element.

Incorporating personality assessment into the CBN competency framework

The Five Factor Model of personality is a trait approach to the conceptualisation of

personality, and even though there are several approaches to personality, it provides a

platform for combining various approaches to personality.25 In psychology research,

there is almost a consensus view that the best representation of trait structure is

provided by the Five Factor Model.26 The Five Factor Model originated from the

theories of Fiske27 and subsequently Norman.28 The model asserts that only five

factors are required for the explanation of variations in personality as evidenced from

questionnaires and descriptions of individual differences in human personality and

behaviour.29 As much as the model is widely accepted as a representing a valid

theory of personality, there are contrary arguments.30 However, the model does not

claim to bear the answers to all possible aspects of personality, but rather deals with

the important elements of the subject of personality.31 As stated in section one, there

are five dimensions of personality in accordance with the Five Factor Model. The

NEO PI-R as developed by Costa & McCrae indicates that the following words are

descriptive of the five personality dimensions:

NEUROTICISM: Anxious, Worrisome, Vulnerable, Pessimistic, Depressive, Bad-

Tempered

25 See Hartmann, note 14 at p 150.26 See J.M. Digman, ‘Personality Structure: Emergence of the Five-Factor Model’ (1990) 41 Annual Review of Psychology 417-440; see also R. McCrae & P.T. Costa Jr., note 16; see also S.V. Paunonen & M.C. Ashton, note 16.27 See D.W. Fiske, ‘Consistency of the Factorial Structures of Personality Rating from Different Sources’ (1949) 44 Journal of Abnormal and Social Psychology 329-344.28 See W.T. Norman, ‘Toward an Adequate Taxonomy of Personality Attributes: Replicated Factor Structure in Peer Nomination Personality Ratings’ (1963) 66 Journal of Abnormal and Social Psychology 574-583.29 See note 26.30 See J. Block, ‘A Contrarian View of the Five-Factor Approach to Personality Description’ (1995) 117 Psychological Bulletin 187-215; see also H.J. Eysenck, ‘Four Ways Five Factors are not Basic’ (1992) 13 Personality and Individual Differences 667-673.31 See Hartmann, note 14 at p 168.

EXTRAVERSION: Social, Friendly, Active, Thrill & Sensation Seeking,

Optimistic, Assertive, Outgoing, Gregarious, Talkative

OPENNESS TO EXPERIENCE: Open to new impressions, Tolerant, Liberal,

Flexible, Creative, Imaginative, In contact with their feelings, Novelty seeking

AGREEABLENESS: Altruistic, Modest, Trusting, Emphatic, Compliant, Polite

CONSCIENTIOUSNESS: Self-disciplined, Ambitious, Foresighted, Responsible,

Orderly, Deliberate

A combination of traits within the five personality dimensions might prove optimal in

terms of achieving the personality profile that would be most suited to effective

performance in the governance roles envisaged and reflected in the CBN framework.

It is arguable that governance is simply an exercise in leadership and job performance.

There has been considerable research in the area of identifying personality traits

which are best suited to leadership roles and job performance. With regard to

leadership, for instance, Judge et al in conclusion of their meta-analysis posit that the

five personality dimensions are useful predictors of leadership ability, and they also

state categorically that Extraversion, Conscientiousness and Openness to Experience

were the strongest and most consistent positive correlates of leadership.32 Arriving at

results that were broadly consistent with the findings made by Judge et al, O’Connor

& Jackson also investigated personality and leadership correlations using alternative

methods which explored a psychobiological approach to leadership using Cloninger’s

psychobiological model of personality.33 In relation to situational factors, O’Connor

& Jackson found their results consistent with the proposition by Zaccaro et al that

personality trait variance is more important than situation based variance in the

prediction of leadership.34 The indication from research that traits such as

extraversion, conscientiousness and openness to experience are best suited and most

32 See Judge et al, note 18. 33 See P.J. O’Connor & C.J. Jackson, ‘Applying a Psychobiological Model of Personality to the Study of Leadership’ (2010) 31(4) Journal of Individual Differences 185-197; see also C.R. Cloninger, D.M. Svrakic & T.R. Przybeck, ‘A Psychobiological Model of Temperament and Character’ (1993) 50 Archives of General Psychiatry 975-990. 34 See S.J. Zaccaro, R.J. Foti & D.A. Kenny, ‘Self-Monitoring and Trait-Based Variance in Leadership: An Investigation of Leader flexibility Across Multiple Group Situations’ (1991) 76 Journal of Applied Psychology 308-315.

indicative of positive leadership ability comes as no big surprise because the

characteristics of individuals with those dimensions of personality is in line with what

is naturally required to achieve effective steering of a group. In line with the

extraversion trait, an effective leader has to be assertive, active, energetic and zealous

in order to inspire his/her constituency to achievement. As regards conscientiousness,

it goes without saying that an effective leader must be consistent and dependable so as

to present a strong focal point for his/her followers. A leader who reneges on his/her

duties cannot be reasonably expected to effectively steer his followers into a pattern

of obedience and conformity. Individuals who have the personality dimension of

open to experience would rightly emerge as effective leaders because imaginativeness

and creativity are traits which are needed in order to harness the potentials inherent in

leadership positions and maximise the usefulness of different kinds of followers.

Neuroticism should rightly have a negative relationship with leadership ability

because an individual who is disposed to characteristics such as anger, pessimism and

anxiety is unlikely to elicit respect and confidence as a leader.

It is evident from the literature and studies analysed above that certain personality

dimensions are better suited to leadership roles. In the governance of banks therefore,

if effective leadership is desired, then it becomes important to take cognisance of

these elements and develop mechanisms which ensure that the persons recruited into

governance positions are those who can be reasonably expected to undertake effective

leadership roles in the banks they govern. Where individuals who are not

appropriately suited to leadership roles are involved in the leadership of companies

such as banks, one can expect things to go wrong at some point. The analysis of

personality dimensions also shows that personality seldom changes and is actually

stable over time, and so we can expect, for instance, that a neurotic person who

becomes a managing director would exhibit neurotic tendencies more often than not

in clear inconsistency with the tenets of good leadership. There is more of a lower

than a higher possibility that such a person would become an appropriate leader at any

point in time.

There has also been considerable research on the correlation between personality

dimensions and job performance.35 The original work done by Barrick & Mount and 35 See Hurtz & Donovan, note 18.

the work of other researchers such as Tett, Jackson & Rothstein and Robertson &

Kinder provides evidence that personality dimensions do have an impact on job

performance.36 In subsequent years, the works of Mount & Barrick, Salgado and

Behling led to conclusions that conscientiousness is a valid predictor of job

performance and represents the primary personality dimension for use in personnel

selection.37 In their meta-analysis, Hurtz & Donovan point out methodological and

statistical issues with past reviews on personality and job performance, and sought to

provide a confirmatory meta-analysis of the relations between the big five and job

performance by including only scales that were explicitly designed to measure the big

five personality dimensions.38 Their overall results were highly consistent with the

original work of Barrick & Mount because they found that conscientiousness had the

highest validity amongst the big five dimensions of personality for overall job

performance. They also found that emotional stability as against neuroticism;

extraversion, agreeableness and openness to experience had some validity depending

on the job criterion. Hurtz & Donovan note that conscientiousness does appear to

have the strongest relation to overall job performance, and anti-neuroticism shows a

consistent impact on job performance. According to the authors, agreeableness gains

importance for jobs that require interpersonal reactions and extraversion does the

same for jobs that have sales and managerial elements.

One relevant question that emerges from the analysis above is what kinds of

personality dimensions are best suited to effective governance in general terms. It is

evident that certain personality types are best suited to leadership roles and these are

extraversion, conscientiousness and openness to experience. It is also obvious that as

regards job performance, conscientious and anti-neurotic personalities are the

strongest and most stable dimensions. It then goes without saying that a combination

of these positively correlated personality types would be best suited to effective

36 See M.R. Barrick & M.K. Mount, ‘The Big Five Personality Dimensions and Job Performance: A Meta-Analysis’ (1991) 44 Personnel Psychology 1-26; see also R.P. Tett, D.N. Jackson & M. Rothstein, ‘Personality Measures as Predictors of Job Performance: A Meta-Analytic Review’ (1991) 44 Personnel Psychology 703-742; see also I.T. Robertson & A. Kinder, ‘Personality and Job Competencies: The Criterion-Related Validity of Some Personality Variables’ (1993) 66 Journal of Occupational and Organisational Psychology 226-244.37 See Hurtz & Donovan, note 18 at p 869; see also Mount & Barrick, note 18; see also J.F. Salgado, ‘The Five Factor Model of Personality and Job Performance in the European Community’ (1997) 82 Journal of Applied Psychology 30-43; see also O. Behling, ‘Employee Selection: Will Intelligence and Conscientiousness do the job?’ (1998) 12 Academy of Management Executive 77-86.38 See Hurtz & Donovan, note 18 at p 875.

governance. However, it may not always be possible to obtain the most appropriate

combination of these personality types, and so it becomes important especially for

increased effectiveness and practicality to decipher which dimensions of personality

are so vital for governance that they should always be present if a reasonable

expectation can be made as regards effective governance. In this regard, an analysis

of the common denominator of appropriate personality dimension as it relates to both

governance roles of leadership and performance is relevant and that personality

dimension is conscientiousness. The correlation of various personality types to these

governance roles has already been discussed, and the impact of each of them has been

analysed. Therefore, even though there is a positive relationship between some other

personality dimensions and the governance roles, the conscientiousness dimension is

singled out here as the most important dimension for the reason that a conscientious

person would be an appropriate leader as well as an appropriate performer on the job.

For reasons of efficiency at least, if there is one personality dimension which if

present in the governance of banks in Nigeria would reasonably create increased

assurances of effectiveness and contribute towards mitigating personality risks, that

personality dimension would be conscientiousness.

McCrae & Costa state thus “…..unlike physical characteristics, personality traits are

abstractions that cannot [usually] be directly measured [but] must instead be inferred

from complex patterns of overt and covert behaviour.”39 In order to identify

personality traits, tests such as the NEO PI-R can be administered.40 The evidence of

reliability, stability and validity of the factors are summarised in the NEO PI-R

manual. Research conducted by McCrae & Costa also suggests that personality traits

conform to the five factor model in various languages other than English in which the

original model was developed.41 The application of the translated NEO PI-R in

cultures and languages such as Chinese, German, Portuguese, Hebrew, Japanese,

Korean and comparisons with the American English factor structure showed similar

structures which leads to the probability that personality traits are universally

similar.42 Therefore, the five factor model provides a good foundation for the

39 See McCrae & Costa, note 16 at p 510.40 See McCrae & Costa, note 17.41 See McCrae & Costa, note 16.42 Ibid.

understanding of personality in most parts of the world.43 It also follows that the NEO

PI-R can be relied upon as a good measurement of personality, regardless of race,

language and culture. The five factor model of personality dimensions is also evident

in both self-reports and external ratings and this presents one of the strongest

arguments in favour of the model.44

It is evident that there is the possibility of identifying personality traits and that these

traits do impact on effectiveness in governance roles. A competency framework

which ignores this critical aspect of determining competency is therefore inadequate.

In addition to the theoretical arguments made in relation to a correlation between

personality and competence, an examination of some corporate failures also supports

the assertion that personality and behaviour influences governance outcomes.

Focusing specifically on the personality trait of conscientiousness which includes the

dutifulness trait, the absence of this trait can be seen to have contributed to the failures

of Lehman Brothers in the US, Oceanic Bank Plc and Intercontinental Bank Plc in

Nigeria. For example, in the Lehman Brothers case, the directors contravened section

401 of the Sarbanes-Oxley Act in relation to disclosures of off-balance sheet items.45

The MD/CEO of Oceanic Bank Plc was indicted for failing to take reasonable care to

ensure the accuracy of the bank’s financial reports and recklessly granting credit

facilities without due process as required by established regulations. In July 2012, a

London court found the former CEO of Intercontinental Bank Plc guilty of devising

and overseeing strategies to buy the bank’s shares contrary to Sections 159 & 160 of

the Nigerian Company and Allied Matters Act (CAMA).

In the Oceanic Bank Plc and Intercontinental Bank Plc cases, the directors and

management of those companies acted contrary to the provisions in CAMA and

corporate governance codes. Section 279(3) of CAMA enjoins directors to act in the

best interests of the company. In these cases, the directors acted in their personal

interests to the detriment of the companies. The CBN Corporate Governance Code

2006 had in section 2 identified weaknesses in the corporate governance of banks to

include fraudulent and self-serving practices, non-compliance with internal controls,

and abuses in lending; and the code had provided principles to guard against such 43 Ibid at p 515.44 See R.R. McCrae & P.T. Costa Jr., ‘Validation of the Five-Factor Model of Personality Across Instruments and Observers’ (1987) 52(1) Journal of Personality and Social Psychology 81-90 at p 82.45 See The Lehman Examiners Report 2010.

practices in sections such as 4.14 which specifies the need for a culture of compliance

with rules and regulations, section 4.17 which provides for the enforcement of a code

of conduct/ethics and section 6.1.2 which deals with transparency and disclosure in

cases where directors are personally interested in services being provided to the bank.

Clearly, the directors in the above cases decided to contravene the established rules

and principles of corporate governance. They were not dutiful and conscientious. In

the final analysis, governance is largely about compliance with principles, rules and

regulations which are established to safeguard operations in a company or

organisation. This is the manner in which standards are maintained. Ironically, the

issue of personality is one which will inevitably affect the potential for company

directors to comply with regulations, including the CBN Competency Framework

itself. If a personality assessment is incorporated into the framework, it will go a long

way towards ensuring effectiveness in the governance of banks and financial

institutions, which is essentially the objective of the competency framework.

Personality assessments can be tailored in line with agreed criteria which are viewed

as relevant for each role. It is argued, however, that the conscientious personality

dimension is vital to the governance role and it is most advantageous, at the very

least, to recruit directors who possess a high level of that personality trait.

Conclusion

This article highlights that the Nigerian Central Bank has developed a competency

framework for the banking industry. The framework is analysed in order to evaluate

the extent to which it achieves its stated aims and objectives. It is argued that

developing the framework is certainly a step in the right direction in terms of

specifying appropriate standards for improved human resources development and

sustainability in the Nigerian banking industry. However, the article particularly

argues that the framework has stopped short of being adequate for the reason that it

ignores the issue of personality, considering its impact on individual behaviour and

therefore its potential to determine eventual outcomes as regards competency. It is

suggested that a competency framework such as the one developed by Nigeria’s

Central Bank should as a matter of necessity incorporate a personality test as part of

the criteria for determining an individual’s ability to perform effectively on the job.

The article also presents arguments as to how such a personality test may be

undertaken and the personality dimension which is best suited to ensuring

effectiveness in the management of banks in Nigeria.

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