The Australian Prudential Regulation Authority (APRA) says a new risk management standard should take effect in January following amendments to address potential problems flagged in industry submissions.

APRA will adjust the definition of “ensure” as it relates to board responsibility, following concerns the previous wording could have become an issue in legal action.

Under the revised definition “ensure” means to make all reasonable enquiries “as are appropriate for a board” to address a matter.

The regulator has also clarified its expectations of boards and committees when it comes to the risk management framework.

“APRA recognises that thinking on risk culture is evolving and it can be difficult to clearly articulate the risk culture of an institution,” the regulator says.

However, it still expects a board to form a view on culture and an institution’s ability to operate within its risk appetite, and to identify changes that should be made.

Further feedback on prudential standard CPS220 and prudential practice guide CPG220 can be submitted by November 4, but APRA only wants comment on the former if the refinements cause fundamental concerns.