APRA commences next phase of push to strengthen and streamline governance requirements – summary and implications for industry

24 June 2026

Executive Summary

APRA's latest consultation, released on 16 June 2026, moves its governance review into the final consultation phase.

The consultation proposes an updated cross-industry Prudential Standard CPS 510 Governance, related changes to CPS 001 Defined Terms, and the removal of routine fit and proper reporting. The consultation remains open until 28 August 2026, with final standards and guidance expected in late 2026 and commencement expected from early 2028.

APRA's policy direction is to raise expectations for boards and senior leaders while reducing duplication and regulatory burden where equivalent regimes already exist.

The latest package is framed as strengthening board governance, conflict management, and fitness and propriety, while streamlining reporting and harmonising previously separate governance, fit and proper, and conflicts standards into a single cross-industry framework.

1. Original consultation: March 2025

APRA's original consultation proposed the first substantial refresh of its governance standards in more than a decade. It identified persistent weaknesses in several key areas of governance frameworks.

The March 2025 package included eight key proposals:

• Stronger board skills and experience requirements.

• Higher minimum standards for responsible persons.

• Earlier APRA engagement on succession planning and appointments for significant financial institutions.

• Extension of conflicts requirements beyond superannuation into banking and insurance.

• Stronger board independence requirements, particularly in groups.

• Clearer role expectations for boards, chairs and senior management.

• A proposed non-executive director tenure limit.

• Consolidation of governance expectations across APRA-regulated industries.

2. Refinements after consultation: October 2025

Following extensive engagement with industry, APRA modified several elements of the original package to avoid unnecessary constraint on boards.

It shifted from a 10-year non-executive director tenure limit, with a possible two-year extension, to a hard 12-year limit, with only short extensions in limited circumstances.

APRA also decided not to proceed with the proposal that banks and insurers have at least two independent directors, including the chair, who do not sit on other group boards.

APRA also dropped the proposal requiring significant financial institutions to engage early with APRA on responsible person appointments and succession planning.

It indicated it would clarify or adjust proposals on individual director skills, perceived conflicts of interest, and publication of registers of relevant interests and duties.

The refinements preserved APRA's overall objective of stronger governance while acknowledging concerns about board flexibility, proportionality and regulatory overlap.

3. Latest consultation: June 2026

The latest consultation proposes a new draft CPS 510 Governance as the central cross-industry governance standard for banks, insurers and superannuation trustees.

APRA's stated objectives are to reflect contemporary best practice, establish clearer benchmarks, address poor practice and support resilience in an environment of economic uncertainty, geopolitical risk, cyber threats and emerging technologies such as artificial intelligence.

The package has four main features.

First, it strengthens expectations for board governance, conflicts management and the fitness and propriety of directors and executives.

Secondly, it removes routine fit and proper reporting, reflecting the introduction of Financial Accountability Regime reporting and reducing duplicative submissions.

Thirdly, it improves flexibility by allowing boards to delegate APRA board requirements in other prudential standards where appropriate, and by aligning governance expectations with other codes and regimes.

Fourthly, it harmonises requirements by combining five existing prudential standards into one, and setting consistent minimum governance expectations across all APRA-regulated entities.

4. Implications for regulated entities

Banks

Banks should expect more explicit expectations for board capability, challenge, independence and oversight of strategic and non-financial risks.

Banking groups will need to review group board structures, conflicts processes, delegations and responsible person frameworks against the revised CPS 510.

Although APRA has softened some earlier independence and succession-planning proposals, banks should not interpret this as a lower bar. Rather, the emphasis shifts to demonstrable governance effectiveness and clear accountability.

The removal of routine fit and proper reporting should reduce administrative burden, especially for larger banks with many responsible persons.

However, banks will still need robust internal evidence that appointments, annual assessments, conflicts management and board renewal decisions meet APRA expectations and can withstand supervisory review.

Insurers

Insurers will need to lift governance arrangements for conflicts, board skills and senior executive fitness and propriety to a more consistent cross-industry standard.

This is likely to be particularly important for insurers within complex groups, mutuals and entities with shared directors or management arrangements, where independence, conflicts and role clarity may receive closer scrutiny.

Insurers should assess whether board skills matrices, committee mandates, risk appetite oversight and emerging-risk governance adequately address operational resilience, cyber risk, claims performance, pricing pressure, climate-related exposures and technology adoption.

The proposed standard is likely to make it easier for APRA to compare governance practices across insurers and against banks and superannuation funds.

Superannuation funds

Superannuation trustees already operate under detailed governance and conflicts requirements, so the most significant effect may be consolidation, clarification and benchmarking rather than an entirely new compliance burden.

Trustees should nevertheless review board renewal, director tenure, skills assessments, conflicts registers, relevant duties and interests, and performance assessment processes against the updated CPS 510 requirements.

Funds with equal-representation boards, sponsor links, group service providers or complex related-party arrangements should pay particular attention to conflicts management and the ability of the board to demonstrate independent judgement.

Larger funds and trustees undergoing mergers, successor fund transfers or operating model changes should ensure governance documentation clearly supports decision-making in members' best financial interests.

5. Recommended actions before commencement

Regulated entities should consider the following actions before commencement:

• Map current governance, fit and proper, conflicts and board assessment frameworks against draft CPS 510 and proposed CPS 001 definitions.

• Assess board composition, skills, tenure and independence against the revised expectations, including any 12-year tenure implications.

• Review conflicts policies, registers, escalation processes and evidence of board challenge, particularly for group structures and related-party arrangements.

• Confirm how Financial Accountability Regime processes interact with fit and proper assessments so that reporting burden is reduced without weakening internal assurance.

• Develop an implementation roadmap to late 2026 finalisation and expected early 2028 commencement, including board education, policy updates and assurance testing.

Overall assessment

APRA's latest consultation is not a retreat from governance reform. It is a recalibration: more consistent and enforceable governance expectations, combined with a more proportionate approach to reporting and prescriptive board-structure requirements.

Banks, insurers and superannuation funds should use the consultation period to test whether their governance frameworks can evidence effective oversight, informed challenge, fit and proper decision-making, conflicts management and resilience oversight in practice.