The Australian Prudential Regulation Authority (APRA) unveiled eight proposals to bolster its governance standards and address "poor" practices within the banking and insurance industry, marking the regulator's first significant policy update in over a decade, according to a Thursday statement from the regulator.

The changes include conducting a board skills assessment on an ongoing basis to address deficiencies in industry experience, particularly during succession planning. APRA also wants to require regulated entities to meet higher minimum fitness and propriety requirements, as well as extend requirements for superannuation trustees in relation to conflict management.

Further, the regulator wants to boost board independence among banks and insurers, such that at least two of their independent directors are not members of any other board within the entity's group, per the statement.

Other changes relate to board performance review, clarity on role expectations, tweaks to risk and audit committees, and tenure limit for non-executive directors.

The proposals will be discussed with stakeholders during a three-month consultation period. A formal consultation is planned for the first half of 2026, with a target to publish the updated framework in 2027 and to start enforcing it in 2028.