When forming a company in Nigeria, one of the most important decisions is determining the size and composition of your board. The Companies and Allied Matters Act (CAMA) 2020 introduced reforms that redefined the rules for director numbers, making it easier for small businesses while imposing new limits on public company directorships.
Minimum and Maximum Number of Directors Allowed in a Nigerian Company (CAMA 2020)
This guide breaks down the statutory minimums, explains the game-changing One-Director Rule, and clarifies the maximum limits under Nigerian law.
Who Is a Company Director in Nigeria?
A director is an individual appointed to manage and direct a company’s operations, as defined in Section 244 of CAMA 2020. Directors come in three types:
Executive Directors: Handle day-to-day operations (e.g., CEO, CFO).
Non-Executive Directors: Provide oversight without daily involvement.
Independent Directors: Offer unbiased guidance, free from company ties (mandatory for public companies).
Directors owe fiduciary duties to act in good faith, avoid conflicts of interest, and work in the best interest of the company and shareholders.
Role of a Company Director
The director's role is governed by Part B, Chapter 7 (Sections 271–307) of CAMA 2020. They are more than mere figureheads; they are legally classified as:
- Agents: Acting on behalf of the company in daily business operations.
- Trustees: Safeguarding the company's assets and managing its affairs.
- Fiduciaries: Owing a high duty of care, skill, and diligence to act in good faith and in the best interests of the company and its shareholders.
Non-compliance with the duties and eligibility requirements outlined in CAMA 2020 can lead to severe consequences, including personal liability, significant fines, or even the dissolution of the company.
Maximum Director Limits and Individual Caps
While the law is flexible regarding the size of a board, it is strict regarding an individual's participation across multiple public boards.
A. Company Board Size (No Fixed Maximum)
For both private and public companies, CAMA 2020 does not set a universal numerical limit on the maximum size of the board.
- Actual Limit is Custom: The maximum number of directors is determined by the company itself and must be explicitly stated in its Articles of Association (AoA).
- Practical Consideration: Most companies cap their boards between 10 and 15 directors.
B. Individual Capacity Limit (The "Five-Public-Boards" Rule)
This is a crucial cap designed to prevent overextension and conflicts of interest among Nigeria's top executives:
Note: An individual can hold an unlimited number of directorships in private companies, provided they can discharge their fiduciary duties effectively.
Special Cases: Sector-Specific Director Requirements
Certain regulated sectors impose stricter minimum and maximum director numbers that override the general CAMA provisions.
Consequences of Non-Compliance
Operating outside the legal thresholds is a serious statutory violation that can expose both the company and its individuals to severe sanctions.
A. Breach of Minimum Director Rule
If a company carries on business for more than 60 consecutive days while operating with less than the minimum required number of directors:
- Personal Liability (Section 318): Every director and member is held personally liable for all debts and liabilities incurred by the company after the 60-day grace period.
B. Breach of Maximum Director Rule (Individual)
- Automatic Vacation of Office (Section 307): If an individual accepts an appointment to a sixth public company board, that position is automatically void, and the individual is liable to a penalty for every day the violation continues.
C. The Quorum Rule
Even if the appointed numbers are correct, the board must always maintain the quorum to transact business:
- The minimum number of directors needed to hold a valid board meeting is generally one-third (1/3) of the total number of directors, subject to a minimum of two directors.
- If the company has only one director (Small Company), that one director constitutes the quorum.
Factors Influencing Director Numbers
The optimal number of directors depends on:
Company Size: Startups may need 1–2, while multinationals often have 7–12.
Sector Rules: Banking and oil sectors require extra directors for CBN or NUPRC compliance.
Articles of Association: May specify numbers or diversity.
Investor Pressure: Foreign investors, driving 30% of FDI in 2025, favor larger boards
Compliance Checklist for Director Numbers
Verify your compliance with this essential checklist based on CAMA 2020:
- Minimum Threshold: Does your company meet the minimum (1 for small, 2 for private, 3 for public)?
- Sector Rules: Does your company comply with any special minimums (e.g., CBN, NAICOM)?
- Public Independence: If public, are there at least three independent directors?
- Individual Cap: Does any director serve on more than five public company boards?
- AoA Adherence: Is your current board size within the maximum limit defined by your Articles of Association?
- CAC Updates: Have all director changes (appointments, removals, particulars) been filed with the CAC within the mandatory 14-day window?
How SplashDict Helps with Director Services
Navigating CAC rules on director appointments and maintenance can be complex, especially with sector-specific variations. SplashDict provides comprehensive corporate secretarial support to ensure your board structure is legally sound and fully compliant.
- Filing of director appointments with CAC.
- Nominee Director services to meet legal requirements.
- Assistance with changes, removals, and resignations.
- Updating director particulars (name, address, gender, phone).
- Ongoing corporate secretarial support.
Frequently asked questions
Get answers to common queries about director numbers in Nigeria under CAMA 2020.
What is the minimum number of directors for a small company?
One director is required (Section 271).How many directors does a standard private company need?
At least two directors are mandatory.What is the minimum for public companies?
At least three independent directors (Section 307).Is there a maximum limit on directors?
No fixed maximum, but individuals cannot exceed five public company directorships.Can a company operate with fewer than the minimum directors?
No, this risks personal liability and CAC penalties after 60 days.Are independent directors required for all companies?
No, only public companies need three independent directors.How does SplashDict help with director compliance?
SplashDict handles appointments, changes, updates, and ensures CAC compliance effortlessly.
Keep your company records accurate by updating director details or appointments with CAC.
Change of Company DirectorFile notice of appointment, resignation, or removal of a director with the CAC.
Change in Particulars of DirectorUpdate Director’s details (name, address, gender, phone number) with CAC.
