APRA just fired the starting gun. Australia’s prudential regulator has moved from consultation into the final phase of its most significant governance reform in a generation — and the clock for boards, chairs, and executives at every bank, insurer, and super fund is now running.
On 16 June 2026, APRA released updated requirements for a new unified CPS 510 Governance standard, combining five existing prudential standards into one. This is not tidier housekeeping. It is a deliberate and substantial shift in what APRA expects from boards — and it comes with a hard deadline: new requirements take effect in early 2028.
The 30-Second Take
APRA’s revised CPS 510 does three significant things at once. It strengthens what it means to be an independent director. It sharpens how conflicts of interest are identified and managed. And it removes the redundant fit and proper reporting burden created by overlapping obligations now that the Financial Accountability Regime (FAR) is in place.
Consultation closes at end of August 2026. The final standard is expected late 2026. Effective date: early 2028.
That may sound like enough time. Boards that think they can start this work in 2027 are already behind.
What’s Actually Changing — and Why It Matters
One Standard, Five Sources
APRA is consolidating CPS 510 and SPS 510 (Governance), CPS 520 and SPS 520 (Fit and Proper), and SPS 521 (Conflicts of Interest) into a single unified standard. For boards that govern across banking, insurance, or superannuation entities, this simplification also brings clearer and higher baseline expectations.
There is no longer room to argue that different standards in different sectors set a different bar.
End of the Independence Presumption
One of the most practically significant changes is APRA’s removal of the presumption of independence for directors who sit on multiple boards within a corporate group.
Under current rules, a director could be regarded as independent even while serving on the board of a parent entity. APRA now considers that arrangement a potential independence risk, not a neutral fact. This directly affects the common Australian practice of placing the same non-executive directors across a parent and its regulated subsidiaries.
Boards will need to actively assess — not presume — independence, and document the basis for their conclusions.
Conflicts Management Gets More Nuanced
APRA’s revised approach to conflicts of interest recognises what practitioners have long known but the rules have not always captured: financial exposure extends well beyond formal substantial shareholdings.
A director holding options, performance rights, or convertible instruments — even below the shareholding threshold — can have interests that impair independent judgment.
The new framework requires regulated entities to identify and manage these broader financial exposures, not just the obvious ones that existing rules already caught.
APRA outlines this is trengthening requirements for board governance, conflicts management and the fitness and propriety of directors and executives
Removes Double Handling and Improves Flexibility
With the Financial Accountability Regime now operational, approximately 6,000 individuals who were previously required to submit fit and proper assessments under both CPS 520 and FAR obligations will no longer face duplicate reporting. APRA Chair John Lonsdale described this as freeing boards to focus on what matters most.
It is a meaningful reduction in administrative burden — and a signal that APRA and Treasury are actively coordinating their accountability frameworks. Entities that have managed FAR and prudential obligations in separate silos should treat this as the prompt to align them.
In addition, this standard is improving flexibility by enabling boards to delegate APRA’s board requirements in other prudential standards, and by aligning governance requirements with other codes and regimes where appropriate.
“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”, Mr Lonsdale
Questions Your Board Should Be Asking Now
- Do any of our current independent directors sit on both this entity’s board and a parent or related entity’s board? How have we assessed and documented their independence, and what will change under the new standard?
- When did we last review our conflicts register for financial instruments held by directors and senior management that fall outside formal shareholding thresholds?
- Are our Board Charter, governance policies, and committee terms of reference ready for the new unified standard, or do they still reference the five separate standards being consolidated?
- How are our FAR accountability mapping and CPS 520 fit and proper assessments currently coordinated? Who owns the reconciliation as APRA removes the duplication?
- What is our timeline for updating governance documentation before the late 2026 final standard is published, so we are not retrofitting in a rush through 2027?
- Has our board delegation framework been reviewed for the flexibility improvements APRA is signalling, and are there practices we need to revisit before 2028?
The Timeline Is Shorter Than It Looks
The consultation period closes August 2026. The final standard arrives late 2026. Effective date: early 2028. By the time the final standard is published, entities with complex group structures, multiple regulated subsidiaries, or directors who straddle multiple boards will need their gap analysis complete — so that implementation planning can begin in early 2027, not as a late scramble at year’s end.
APRA’s stated aim is to raise expectations while giving boards more room to focus on what matters.
The entities that benefit most from that second half of the sentence will be the ones who have done the first half’s homework early.
Stay Across What’s Coming
The Innovation of Risk Reading Room tracks APRA, ASIC, and other regulatory developments as they move from consultation to enforcement. If your board or risk team wants a structured way to monitor governance obligations and stress-test your frameworks against what is coming, that is the place to start.