The Ojeagbase Cognitive Governance Method for Sustainable Debt Recovery: A Five-Stage Board Framework for Deposit Money Banks in Nigeria

Abstract

Abstract Purpose: This methodological paper introduces the Ojeagbase Cognitive Governance Method™, a novel five-stage board framework for governing distressed credit and non-performing loans (NPLs) in deposit money banks (DMBs). Existing bank governance codes emphasize structures and independence but provide limited actionable guidance on how board cognition translates into sustainable recovery outcomes. Drawing on Upper Echelons Theory (Hambrick & Mason, 1984; Hambrick, 2007) and dynamic capabilities micro-foundations (Helfat & Peteraf, 2015), the paper operationalizes cognitive governance for the NPL lifecycle. Design / Methodology / Approach: The method is developed from doctoral fieldwork on selected DMBs in Nigeria, regulatory analysis of CBN Corporate Governance Guidelines, IFRS 9, and recent international guidance including FSB Sound Practices for AI Adoption (10 June 2026), RBI Model Risk Management Framework (24 June 2026), OSFI Generative and Agentic AI Bulletin (13 July 2026), and EU AI Act (2024) and AI Omnibus (Regulation 2026/1744, entered into force 27 July 2026). The framework comprises five interlinked stages: (1) Signal, (2) Sense, (3) Decide, (4) Account, and (5) Learn. A 90-day pilot protocol and seven-dimension verifiability dashboard are proposed. Originality / Value: First method to operationalize cognitive governance specifically for sustainable debt recovery in African DMBs. While the term cognitive governance has emerged in AI-use governance (Lardi & Partner, 2026), its application to NPL governance, action register, accountability register, material-case threshold, and board-facing rule is original and verifiable via pilot metrics. Practical Implications: Provides regulators, boards, AfDB, and AMSG with a recovery assurance framework to prevent NPL creation from critical minerals beneficiation financing and to strengthen sustainable recovery. Keywords: Cognitive Governance; Ojeagbase Method; Sustainable Debt Recovery; NPL; Upper Echelons Theory; Board Accountability; DMBs Nigeria; AI Governance JEL: G21, G28, G32, G34, M12, O33 DOI: To be minted via Zenodo – 10.5281/zenodo.22207161 Licence: CC BY 4.0