More push-back on APRA and super board appointments

Mike Taylor

Managing Editor/Publisher, Financial Newswire

23 June 2025

The Australian Prudential Regulation Authority (APRA) has been asked to explain whether it has ever previously involved itself in the processes around the appointment of board members.

Australia’s two major accounting groups, CPA Australia and CA-ANZ, have queried APRA’s proposal to “require significant financial institutions (SFIs) and non-SFIs under supervision, to engage proactively with APRA on potential appointments”.

The concerns of the accounting groups follow on from those of the major superannuation lobby groups, with the Association of Superannuation Funds of Australia (ASFA) stating APRA should hold “a quasi right of veto”.

The two accounting groups have told APRA that while they support strengthening the fitness and propriety assessments of board members, they have multiple concerns.

And on the question of APRA ‘proactively’ engaging in potential board appointments, CPA Australia and CA-ANZ they said: “APRA should provide more details on the proposal to involve itself in the board appointment process (e.g. candidate interviews) as part of non-binding guidance only”.

“We would like to understand where APRA might have used such a process in the past, to alleviate our concerns,” the two groups said.

Responding to APRA’s Governance Review Discussion Paper the two accounting groups also said they support APRA’s proposal to impose a lifetime default tenure limit for non-executive directors at a regulated entity.

At the same time, they said that APRA should also be taking into account the cognitive capacity of board members.

“While sensitive, APRA should acknowledge that tenure limits alone may not address age-related decline. Fit and proper assessments should include cognitive capability where appropriate,” they said.

As well, in an oblique reference to the manner in which some superannuation fund board members had served longer terms, they referenced the need to review tenure resets when fund mergers occur.

“APRA should clarify how tenure is calculated post-merger to avoid artificial resets,” they said.