This post discusses the pros and cons of term limits for nonprofit boards.
Is your board grappling with whether to implement board term limits? Many boards struggle with this decision. There are certainly pros and cons.
With term limits, nonprofits have the option of weeding out unproductive or uncooperative board members. Defining this length of time upfront can prevent lots of hurt feelings down the road. It can also keep people focused to provide their best service during a finite period of time.
If you want to implement board terms, you should clearly define the length of a single board term in the by-laws. But how many terms are enough?
What are the most common term set-ups?
According to Leading with Intent: 2017 Index of Nonprofit Board Practices, 72 percent of nonprofit boards have term limits. The most common board member term structure is two, consecutive three-year terms.
A staggered term system allows a certain number of new members to be chosen each year, preventing no more than one-half (preferably one-third) of the terms from expiring at the same time.
Pros of Term Limits:
- New talents and perspectives: When boards are first founded, the organization is just trying to get off the ground. However, success brings expansion into new areas that the original board might not be equipped to handle.
- Opportunity to bring in younger board members: If you bring someone in at age 35, by age 41 they have probably fulfilled their board service. They can then be ambassadors for your organization for decades to come. Some boards set aside one or two board positions specifically for the under-40 group.
- Prevent stagnation, tiredness, boredom, and loss of commitment: Eventually, all batteries need recharging, right? Board members may become complacent over time, so term limits are a great way to ensure that you always have high-energy people.
- Prevent the concentration of power within a small group of people: When such a power dynamic exists, it can be intimidating to new board members. The board can seem like a closed social club when a group of board members stays in power for a long time.
- Improve your fundraising: Term limits can actually improve fund development. Former board members are great ambassadors and enable you to reach further into the community.
- Prevent the onset of Founder’s Syndrome: Founder’s Syndrome occurs when one or more founders maintain disproportionate power and influence following the initial establishment of the organization, leading to a wide range of problems.
Cons of Term Limits
- Lack of continuity: Continuity is important to decisions about mission and direction, which require an in-depth knowledge of the organization. The lack of continuity can become a problem for the executive director, particularly when terms are only two years long.
- More work for the governance committee: More time is required for the identification, recruitment, and orientation of new board members with term limits.
- More work for the executive director: The ED must dedicate additional time to building the cohesiveness of the board as members rotate on and off the board
What about board chairs and other officers?
Board chairs play a critical role in board leadership and development, devoting considerable time to the organization and exerting considerable influence over the board. Term limits help prevent board chairs from burning out by shortening the duration of their commitment.
Term limits also enable the board to adjust its leadership to suit changing organizational needs and help protect the board and chief executive from an ineffective chair. Board chairs are more likely than other officers to have term limits. According to Leading with Intent, the most common chair structure is two, consecutive one-year terms. However, certain boards decide that it is too disruptive to change leadership every two years.
By comparison, other officer positions offer a measure of continuity and depth of institutional knowledge because of the likelihood of longer tenure. Other officers, especially the treasurer, often bring specialized knowledge that may be difficult to replace on a regular basis.
That said, recruiting board members with leadership capabilities and grooming them for officer positions remains important for board revitalization. According to Leading with Intent, the most common term structure for vice chairs, secretaries, and treasurers is an unlimited number of one-year terms.
Alternatives to Term Limits
Some boards don’t have term limits, but instead, impose periodic board evaluations to assess performance. Other organizations ask board members to take a brief hiatus of six months or a year before applying for board re-election. The board member may become rejuvenated OR realize that resignation is in the best interest of all.
Term limits don’t have to mean goodbye. Former board members are great ambassadors of your organization. Figure out smart ways to keep them involved. Retiring board members can be appointed to other less demanding positions within the organization or remain active as volunteers. Bring former board members in for special fundraisers.
An emeritus board member is an honorary title used to recognize a director who has provided outstanding service to the nonprofit. Over time, there may be several directors who are honored this way and the group may be referred to as an emeritus board.
Misuse of board terms
Many boards make the mistake of using term limits to avoid discussions about poor board member performance. Instead of having a difficult conversation, boards just ride out the storm, waiting for the term to end.
This can be detrimental to morale. Just waiting it out can prevent you from “cleaning house” and getting more effective board members earlier. The executive director needs a strong board chair who is willing to have those difficult conversations with nonproductive board members. Ideally, every board should have strong governance processes in place for performance assessment.
In my opinion, one of the worst practices is to acknowledge you’re not following your bylaws regarding term limits. I’ve heard executive directors say, “Oh, we have term limits, but we don’t enforce them.” If you’re not following your bylaws, you might be setting yourself up for trouble down the road.
If you don’t want term limits, simply amend the bylaws! (Incidentally, it is a good practice to have an attorney review your bylaws every 2-3 years.)
Summary: If you haven’t considered term limits, give it some thought. Regardless of your decision, you will have done your due diligence and likely have thought of some creative ways to engage your current and former board members. You will probably end up with even more people invested in your organization! For help with term limits or other board issues, book a 90-minute strategy session with me here.
