The Australian Prudential Regulation Authority (APRA) has issued a discussion paper setting out eight proposals to strengthen its prudential governance framework for banks, insurers and superannuation trustees, marking its first significant update to governance standards in more than a decade. The package aims to set clearer governance benchmarks and address areas of weak practice that APRA links to heightened supervisory risk. Key proposals include higher expectations for boards to maintain an appropriate mix of skills and experience, stricter minimum standards for the fitness and propriety of responsible persons, and a requirement for significant financial institutions to engage with APRA on succession planning and potential appointments. Other measures would extend superannuation trustee conflicts management requirements to banking and insurance, strengthen independence requirements particularly for entities within groups, clarify the roles of boards, chairs and senior management, and introduce a lifetime 10-year tenure limit for non-executive directors at an APRA-regulated entity. APRA also proposes proportional application with reduced expectations for smaller and less complex institutions, alongside streamlining into a single set of prudential standards across APRA-regulated industries by removing duplicative or unnecessary requirements. APRA will run a three-month consultation with stakeholders including regulated entities, directors, industry bodies and consumer representatives. It plans to release updated prudential standards and guidance for formal consultation in the first half of 2026, publish the updated framework by the beginning of 2027, and have it commence by 2028.
Australian Prudential Regulation Authority 2025-03-06
Australian Prudential Regulation Authority consults on governance reforms including a 10-year non-executive director tenure limit
The Australian Prudential Regulation Authority (APRA) has proposed eight measures to update its prudential governance framework for banks, insurers, and superannuation trustees, the first major update in over a decade. Key proposals include heightened board expectations, stricter standards for responsible persons, mandatory APRA engagement on succession planning, extending conflict management to banking and insurance, strengthening independence requirements, clarifying roles, and a 10-year tenure limit for non-executive directors. APRA suggests proportional application for smaller institutions and aims to streamline standards across industries.