APRA has called for boards in the banking, insurance and superannuation industries to force directors who don’t meet its “stringent” standards to retire. And if they don’t, APRA will do it for them.

Tough words, and they’re probably a little late. APRA is leaving no stone unturned to ensure all its charges are squeaky clean as it endures the continuing embarrassment of the HIH Royal Commission.

GM for Enforcement Darryl Roberts told the annual conference of the Association for Compliance Professionals of Australia that some directors are under the “undue influence of a dominant CEO” while others neglect accountability for accurate financial reporting.

“While we are confident that the vast majority of directors comply with APRA standards, almost every serious situation we come across in the financial services sector can be traced back to management and, ultimately, a weak board,” he said. 

Mr Roberts said boards of regulated entities must be “diligent, commercially astute, balanced and totally independent. We expect them to be screening all prospective board members and senior executives for these attributes.”  

He said if company boards don’t force unsuitable directors to retire, APRA will use its regulatory powers to do so. “If companies fail to screen and cull their boards, APRA will remove [them],” Mr Roberts said.