APRA proposes changes to strengthen and streamline governance and fit and proper requirements

The Australian Prudential Regulation Authority (APRA) has released a discussion paper for consultation outlining eight key proposals to strengthen its prudential governance framework for banks, insurers and superannuation trustees.

APRA’s proposed changes include:

• lifting requirements for boards to ensure they have the right mix of skills and experience to deliver the entity’s strategy

• raising minimum standards around the fitness and propriety of responsible persons, and requiring significant financial institutions to engage with APRA on succession planning and potential appointments

• extending existing requirements for superannuation trustees in relation to managing conflicts of interest to banking and insurance

• strengthening board independence, especially in relation to entities that are part of a group

• clarifying APRA’s expectations around the roles of boards, the chair and senior management

• introducing a lifetime tenure limit of 10 years for non-executive directors at an APRA-regulated entity

APRA is seeking feedback to the discussion paper by 6 June 2025, which can be directed to PolicyDevelopment@apra.gov.au . During the consultation period, APRA notes that it expects to hold roundtable discussions with industry and other stakeholders to explore the issues and options identified by this paper and their anticipated impacts.

If members have any questions, queries or feedback relating to this consultation process, please contact Luke O’Donnell at luke.odonnell@afia.asn.au.

APRA intends to release updated prudential standards and guidance for formal consultation in the first half of 2026. APRA aims to publish the updated framework by the beginning of 2027 ahead of it commencing by 2028. The discussion paper can be accessed here.