Not all boards have term limits, but all boards should have term limit policies. Term limits are considered best practices for all types of corporations and organizations. Colleges and universities should develop term limit policies that outline the term limits for each board seat and the maximum number of consecutive terms that a board member is allowed to serve.
In case you’re wondering how those guidelines pan out in the real world, according to a 2010 national survey by BoardSource, about a third of the organizations surveyed stated that they didn’t have term limits for board chairs at all. About 64% of independent boards have term limit policies, as compared with 40% of public boards that don’t have term limit policies.
Term limits for board members help to make the case for board director recruitment, which is why nominating and governance committee strive to have a pipeline of resumes on hand as needed. In recruiting people to fill board seats, more people are likely to accept nominations when they know their term has a specified limit.
Term limits for board members force organizations to develop new leaders. At some point, the current board chair will be stepping down. With this in mind, governance committees serve their boards well by recruiting board members who have been or can be trained to have the necessary qualities to fill the board chair’s role.
Nominees for college board member seats are more likely to say “yes” to board service when they know that the board seat may lead to the position of board chair. Serving as a board chair will enhance the chair’s resume and experience, which are both factors that take those interested in furthering their careers far in the real world.
The issue of term limits for board members certainly has its drawbacks. However, by and large, the majority of people and organizations support term limits for college and university boards.
The Case in Favor of Term Limits
There’s no shortage of opinions when it comes to the issue of term limits. Those in favor of term limits for board members appreciate the ease of saying farewell to board directors or board chairs who are difficult to get along with. For board directors who habitually miss meetings and fail to participate in board discussions, term limits for board members provide a nonconfrontational way to allow a board director to leave the board gracefully, automatically and without incident.
Nonprofits sometimes overlook an important way that term limits can enhance nonprofit fundraising efforts. Board directors are expected to donate their own funds and to use their personal and professional networks to increase volunteer donor funds. If the same people serve year after year, eventually, they’ll tap out all of their resources. As new board directors rotate onto the board, they bring with them a new network of fresh donors.
Yet another benefit to term limits is that it leads to healthier boards. Board directors who serve for long periods may experience burnout. In addition, bringing new directors into the boardroom periodically decreases the possibility that one or two people will monopolize board discussions. New board directors bring new ideas and new energy with them, which may be contagious.
Drawbacks of Term Limits
In spite of the many positive things that term limits bring, critics are quick to point out that there are a lot of downsides to term limits.
The problems with term limits for board members are particularly evident when a term limit is as short as two years. It takes new board directors time to get up to speed on how to make decisions that are aligned with the organization’s mission and vision. Board directors need to serve long enough to get grounded in the organization. Continuity is important to being able to finish projects that board directors start.
The issues that plague the nonprofit world can be extremely complex. It may take several years to vet issues and situations thoroughly and organizations benefit well when the originating board director serves long enough to see a major initiative through to the end. When board directors have to leave their terms, they often leave unfinished business behind and take institutional knowledge out the door with them.
It’s also imperative for boards to recognize that term limits shouldn’t be used as a crutch for poor or underperforming board directors. There tends to be an attitude that since a board director is soon to rotate off the board, it’s not necessary to address poor performance. Such a stance doesn’t serve the outgoing board director, the remaining board directors or the organization well.
Best practices for college boards suggest that boards should be doing annual board self-evaluations. The results should be the basis for deciding whether board members should remain on the board, whether they need additional training or whether it’s time for them to resign.
Short term limits can be especially problematic for the position of college board chair. One of the ways that some boards tackle this issue is by creating a position for a chair-elect or immediate past chair. The outgoing board director can then prepare, support and mentor the new chair. This type of arrangement also gives the outgoing chair a continued voice after their term ends. Without a role that offers leadership or continuity, an outgoing board chair with a short term may get forced out early, which doesn’t benefit anyone.
In summary, board term limits may be a strong positive or a debilitating negative. Either way, boards are well-advised to make the best use of annual board self-evaluations — a process that is easy to do with BoardEffect’s built-in survey feature. In addition to evaluating whether board directors are performing effectively, college boards occasionally need to take a fresh look at their board policies surrounding term limits for board members and how those term limits have manifested in positive or negative outcomes over time. Perhaps the best thing about term limits is that if the current structure isn’t working, there’s always the possibility of amending the bylaws to increase one or more of the terms to take advantage of the special benefits that longer terms present.