T+O+M BLOG

APRA has unveiled significant governance reforms targeting banks, insurers, and superannuation funds. As a specialist recruiter in legal and corporate governance within financial services, I’ve seen firsthand how regulatory shifts shape board structures, leadership decisions, and the demand for experienced governance professionals. These latest proposals, which mark the most substantial updates in over a decade, are definitely set to shake things up.

Key Changes and Their Implications

1. 10-Year Tenure Cap for Non-Executive Directors
APRA is pushing for a 10-year limit on non-executive director tenure, aiming to bring fresh perspectives and mitigate the risks of long-serving directors becoming too embedded. While this makes sense from a governance standpoint, it raises questions about the loss of institutional knowledge and whether financial services firms are equipped to manage board succession effectively. As a recruiter, I foresee increased demand for skilled governance professionals with deep sector experience but fresh perspectives.

2. Stronger Conflict of Interest Management
APRA plans to extend conflict management requirements—currently applied to superannuation trustees—to banks and insurers. This means stricter policies on identifying, disclosing, and mitigating conflicts. For boards, this will require more robust governance frameworks and possibly a shift in how executives and directors balance multiple roles. We’re likely to see an uptick in governance and risk advisory roles, as institutions seek to tighten their compliance functions.

3. Strengthened Board Independence Rules
The reforms propose that at least two independent directors—one of whom must be the chair—should not hold directorships within the same corporate group. The goal is to reduce groupthink and enhance independent oversight. While this may enhance governance, it could also limit the talent pool, making board recruitment more challenging, especially for niche financial services firms.

4. Mandatory Independent Board Performance Reviews
APRA wants significant financial institutions to undergo independent assessments of board performance every three years. This reflects a broader shift towards data-driven governance insights. The expectation is that boards will have to demonstrate continuous improvement, meaning board composition, effectiveness, and even cultural dynamics will come under greater scrutiny. This could increase demand for governance consultants and board effectiveness specialists.

What This Means for Financial Services Professionals

From a recruitment perspective, these reforms will drive demand for experienced corporate governance professionals, compliance specialists, and independent directors with deep sector knowledge. Boards will need to rethink succession planning, ensuring a balance between fresh perspectives and retaining critical expertise.

For those working in governance, risk, and compliance, now is the time to refine your expertise, stay ahead of regulatory trends, and position yourself as an asset in a changing landscape. And for financial services firms, investing in the right governance talent will be key to staying ahead of regulatory expectations while maintaining effective leadership.