APRA revises governance requirements for financial institutions and ASIC releases its new roadmap for Australian capital markets.
APRA refines governance proposals
In a welcome development, the Australian Prudential Regulation Authority (APRA) has revised its approach to new governance requirements for financial institutions. In a letter published in October, APRA reiterated its commitment to setting contemporary governance expectations for boards and senior leadership through the prudential framework. In response to stakeholder feedback (including from the AICD and directors) the regulator will adjust its approach on several key proposals.
The AICD has welcomed APRA’s response, and the regulator’s consideration of concerns raised by directors and the AICD during the consultation period. Key areas are:
- 
Director tenure: APRA’s proposal for a “hard limit” of 10 years will be extended to 12 years (with extension in limited circumstances).
- Intra-group independence: APRA will not proceed with prescriptive independence requirements for boards within group entities, replacing this with more explicit requirements in conflict management/performance reviews.
- Early engagement on appointments: APRA will not proceed with a proposed prudential requirement for early engagement with the regulator on key appointments, but will encourage engagement as better practice.
- Individual director skills: APRA will clarify it does not intend for entities to define/disclose required skills at individual director role level, while still requiring entities to have a credible documented view of requisite board skills.
We are supportive of these changes, which are consistent with issues raised by the AICD during the consultation.
The AICD is also calling for a roadmap to reduce the 150 board-level obligations that APRA imposes through the prudential standards as it advances its reforms, to allow greater board focus on forward-looking risk management and growth.
Thank you for members’ input on these proposals, in particular the AICD’s APRA Forum. The AICD will participate in consultation on draft standards, expected in mid-2026. Final new standards are expected to take effect in 2028.
FY26 regulatory priorities
The AICD advocates for balanced, fit-for-purpose regulations that support diligent directors to govern for growth. Our FY26 regulatory priorities have a strong focus on productivity and growth.
- Better regulation through better law-making
- Reporting regimes that support productivity
- Digital regulation that promotes growth and competitiveness
- National governance and long-term policy focus
ASIC roadmap for capital markets
The Australian Securities and Investments Commission (ASIC) has released its highly anticipated roadmap to promote strong, efficient and globally competitive markets in Australia.
The corporate regulator’s Advancing Australia’s evolving capital markets (REP 823) report draws on work since its discussion paper on private and public market dynamics earlier this year. This includes stakeholder consultation (including with directors and the AICD), expert reports on market dynamics and international trends, and private credit surveillance.
Healthy public and private markets are essential, alongside complementary pillars of economic stability and global competitiveness. As ASIC chair Joe Longo put it, Australia needs to adapt and innovate or risk being left behind.
The ASIC roadmap includes initiatives to support dynamic public markets, including streamlining IPO processes (continuing the “fast track” pilot), a policy review to streamline dual listings, listing standards (for example, thresholds for foreign exempt listings, free float settings, prospectus disclosures and publicity guidance) and reconsideration of the “one size fits all” approach to listed entities.
We welcome ASIC’s commitment to engage with government and industry on corporate governance frameworks for listed entities and differences in public and private market expectations.
It was encouraging to hear Joe Longo in his National Press Club address welcome formation of the Corporate Law Reform Alliance — of which the AICD is a member — and our call to revive an expert body such as the Corporations and Markets Advisory Committee (CAMAC) to support corporations law reform.
In a welcome step, ASIC has committed to working with APRA to simplify the Financial Accountability Regime (FAR) to reduce administrative drag.
ASIC also acknowledges Australia’s comparatively burdensome remuneration reporting requirements and is open to engaging with government to enable simplification and enhance productivity.
The regulator also issued the findings of its surveillance of private credit — Private credit surveillance report (REP 820) — flagging concerns about transparency, credit and liquidity risk management and fees. ASIC has set out the principles that will inform its approach to surveillance and enforcement.
The roadmap recognises the systemic role of superannuation in shaping Australia’s capital markets and dynamics. Market conduct and integrity, investment disclosures and platform regulation are priorities for the sector.
New AICD director resources
The AICD has new director guides and research to support directors available on our website.
Nature enters the boardroom: Australia’s first study into how boards and directors are responding to the increasing global focus on nature impacts in governance. Completed with the University of Sydney Business School, our new report draws on insights from directors and stakeholders, and provides insights on current/emerging practice.
AI use by directors and boards: The AICD is exploring how Australian directors and boards are using AI tools to enhance boardroom practice, with use cases ranging from meeting preparation to AI-powered boardroom agents. Informed by consultation with directors, company secretaries and technology providers, the report seeks to support board engagement while providing practical guidance to directors.
This article first appeared as 'Heading in a new direction' in the December 2025/January 2026 Issue of Company Director Magazine.
Director Resources
Directors’ oversight of company compliance obligations
- The AICD’s Practice Statement, supported by a legal opinion from Michael Hodge KC and Sonia Tame, on meeting the duty of care and diligence in overseeing company compliance.
Free climate governance e-learning
- Available free to all AICD members, and supported by extensive resources via the Climate Governance Initiative.
Cyber security priorities for boards in 2025–26
- Joint guidance from the AICD and the Australian Signals Directorate on current cyber governance priorities for boards.
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