The Australian Prudential Regulation Authority opened consultation on Tuesday on what it called the next phase of a push to strengthen and streamline governance across regulated financial institutions, including draft revisions to Prudential Standard CPS 510 Governance. The package, released on 16 June 2026, includes an updated draft CPS 510 that would combine five existing prudential standards into one and set consistent governance minimums for all APRA-regulated entities.
The consultation package covers banks, insurers and superannuation trustees, applying a single governance framework across the three sectors APRA supervises.
SCOPE OF THE DRAFT CPS 510
APRA said the new CPS 510 would strengthen requirements for board governance, conflicts management and the fitness and propriety of directors and executives. The draft standard includes sections on board composition and independence, board skills and capability, and board renewal and non-executive director tenure.
Under the draft, each locally incorporated regulated entity would have to document in a Board skills matrix the skills, experience and behavioural attributes its board and committees need, having regard to its strategy, business mix, risk appetite and complexity, and maintain a board renewal policy and plan. A non-executive director could serve no more than 12 years in total, with an extension of up to 12 months allowed in exceptional circumstances.
APRA Chair John Lonsdale said: "Strong governance is fundamental to the safety, resilience and performance of banks, insurers and super funds. Over a long period of time, APRA has observed that problems at our regulated entities can be frequently traced to poor oversight, unclear accountability or weak challenge."
FINAL PHASE OF A REVIEW BEGUN IN 2025 APRA began consulting on proposals to modernise its governance requirements in March 2025 and refined some of them in October 2025. The June package, which also proposes removing routine fit and proper reporting for about 6,000 individuals and proposes a 12-year tenure limit for non-executive directors, is the last stage of that review. Consultation closes on 28 August 2026, with the final standard planned for late 2026 and implementation from early 2028.
Lonsdale said: "Alongside lifting expectations, we’ve sought to strike the right balance between safety and efficiency. In allowing boards more freedom to delegate lower value compliance matters and reducing reporting, our goal is to ensure boards have capacity to direct their attention to the issues of most importance."
APRA said feedback from consultation and stakeholder meetings would inform the final standard and related guidance.