When the Australian Prudential Regulation Authority released its revised governance standards last week, maintaining a strict 12-year cap on board director tenure, the response from the industry super sector was immediate and revealing.  

AustralianSuper said there was “no justification for prescriptive time limits”. The Australian Council of Trade Unions called it “regulatory overreach”. The Australian Services Union went further, characterising the proposal as an “ill-informed attack” on union-appointed directors. 

This is not a great look in 2026. 

I am not a participant in the so-called superannuation wars. I have spent much of my career, including as chair of the Rudd government’s Super System Review, trying to improve the system for the people it exists to serve, namely, members. Through that lens, APRA’s tenure reform is not overreach, it is overdue. 

Tenure limits are hardly an APRA invention. They are embedded in governance codes across every major capital market. The UK Corporate Governance Code treats nine years as the point at which director independence begins to erode. Institutional Shareholder Services routinely flags directors who have served beyond a decade as a governance concern. 

These are the same codes, and the same proxy advisers, that Australia’s largest super funds cite when voting against the re-election of long-serving directors of listed companies. When a bank or a mining company resists board renewal, big super funds are typically at the front of the queue demanding change. 

Their own submissions force us to ask an uncomfortable question: why should the governance standards they apply to the assets they own not apply to themselves? 

APRA’s paper states bluntly that “supervisory experience over the past decade has shown that supervision and guidance alone is ineffective in changing practices”. 

That is a frank admission, backed by evidence the regulator has put to parliamentary committees, that softer interventions have not worked. 

APRA chair John Lonsdale has observed that problems at regulated entities “can be frequently traced to poor oversight, unclear accountability or weak challenge”. The funds pushing back might ask themselves how many of the governance failures of recent years involved long-serving directors operating in cultures of weak challenge. The honest answer is quite a few. 

The skills gap hiding in plain sight 

There is a harder dimension to this debate that opponents of term limits are not engaging with. The Conexus Institute*, whose advisory board I chair, has been researching the skill sets represented on super fund boards. Among its striking early findings is that across the entire universe of Australian funds, it could find barely any evidence of board members whose listed expertise included financial advice. 

Its research also finds a handful of chairs have been in their roles for well beyond nine years, and one has enjoyed this privileged position for almost two decades. 

Both tenure and skills particularly matter at the present because the system is in the middle of a profound transition. Funds are now retirement institutions, required under the Retirement Income Covenant to guide members through decumulation, which is fundamentally an advice problem.  

As the Institute’s executive director Dr David Bell has observed, a board skills matrix for any fund serious about retirement outcomes must include advice expertise. 

Properly designed tenure limits create the conditions for that renewal. They are a forcing mechanism for boards to ask who they need around the table to meet the challenges ahead, not the challenges of fifteen years ago. 

APRA has already accommodated industry concerns, extending the proposed limit from ten to twelve years (I personally prefer nine) and allowing further extensions with regulatory notification. The residual objection amounts to a claim that the right to make indefinite exceptions should be preserved.  

The global evidence, including the very governance frameworks these funds apply to their portfolio companies, suggests that long tenure too often leads to familiarity being mistaken for expertise, and loyalty for oversight. 

Super funds are now significant global financial institutions. They should be regulated, and should govern themselves, accordingly. 

Jeremy Cooper is chair of The Conexus Institute advisory board and led the Review into the Governance, Efficiency, Structure and Operation of Australia’s Superannuation System in 2009-10. 

The Conexus Institute is a not-for-profit think-tank philanthropically funded by Conexus Financial, publisher of Investment Magazine.