On 24 October 2025, the Australian Prudential Regulation Authority (APRA) provided an update on its earlier consultation to modernise the prudential framework on governance for banks, insurers and superannuation trustees.

Background

In March, APRA proposed eight measures to update its cross-industry prudential standards and guidance on governance for the first time in more than a decade. During the three-month consultation period, APRA held 57 meetings and roundtables involving over 150 stakeholder organisations and received almost 80 written submissions. The feedback from these meetings and roundtables was broadly supportive of the proposals but APRA also heard caution around the potential impact of some proposals.

Changes

APRA has now written to industry advising that it is updating the following proposals:

  • Lifetime default tenure limit of 10 years: APRA’s original proposal was to impose a lifetime default tenure limit of 10 years for non-executive directors at a regulated entity. APRA now proposes a hard tenure limit of 12 years with short extensions in limited circumstances. APRA believes a hard tenure limit is necessary to improve board renewal practices but acknowledges that 12 years is more aligned with existing board arrangements and cycles.
  • Two independent directors: APRA originally proposed that at least two independent directors (including the chair) on regulated entity boards are not members of any other board within the group. This proposal will not proceed as originally proposed. However, APRA remains focused on addressing the management of intra-group conflicts via updates to its governance standards.
  • Early engagement on responsible person appointments and succession planning: The proposal to require significant financial institutions to engage early with APRA on responsible person appointments and succession planning will not proceed. APRA still considers early engagement on critical appointments to be best practice. However, APRA will not make it a legal requirement given the process and privacy risks.

These changes will be formally consulted on in Q2 of 2026.

APRA is also clarifying or adjusting three other proposals where stakeholders have identified unintended consequences or suggested better ways to achieve APRA’s intended outcome:

  • APRA clarifies that, while its proposal requires regulated entities to identify and document the skills and capabilities needed for the board as a whole and for each individual director, it does not expect entities to define the requisite skills for each individual director role.
  • APRA intends to set out its proposal requiring regulated entities to consider perceived conflicts, in addition to actual and potential conflicts, in guidance only.
  • The requirement to have a register of relevant interests and duties will be extended to all regulated entities as proposed but APRA will not require banks and insurers to publish them.

Next steps

APRA will provide a comprehensive response to stakeholder feedback on its proposals with release of draft standards and guidance in Q2 of 2026.