The Nonprofit FAQ

Should boards of directors have term limits?

Hildy Gottlieb of http://www.Help4NonProfits.com asked on May 8, 2005: I have been working with a client on completely restructuring how their board operates. A concern has arisen among the group about term limits. Like many groups, some years back they had a wretched long term board member they wanted to be done with, so they instituted term limits. Then, as happens with any decision made in reactive problem-solving mode, the law of unintended consequences kicked in. Fast forward to today, and they are now having to say goodbye to one of the most amazing board members even I have ever met. They don't want her to leave, and she doesn't want to leave. So now they are reconsidering, again in a reactive mode - should they eliminate the term limits? I am encouraging them to consider all sides of this issue, as was not done previously. If they remove term limits, how do they handle "bad board members" so the issue doesn't just come back full circle to where they were 5 years ago when they instituted the term limits in the first place! Renata J. Rafferty, Principal, http://www.raffertyconsulting.com responded: Just came across this exact same situation with a client (director's turn was up but they REALLY could not afford to lose this person at this time). My advice was rather than remove that bylaw (I think term limits are crucial on boards), that the board take an active vote to "temporarily suspend" that provision of the by-laws in the best interests of the organization at this time, and to record in the minutes exactly why the temporary bylaw suspension, an extraordinary action, was voted. Put a time limit on it (one year) and name the individuals to whom this suspension will apply and why. We all know one of the reasons term limits are so crucial. I call it "the tyranny of nice." That is, friends, neighbors and associates are loathe to put their fellow board members -- all volunteers to boot -- in the awkward position of (a) pitching someone off the board because they are a worthless loser or a royal pain, (b) calling them on the carpet for (fill in the blank), and (c) actually make everyone eligible stand for re-election at the start of each new term. None of those actions are "nice." My more general recommendation: A board member does not "automatically" get a second term. When someone's first term is up, they must be re-elected to the second term. And all elections are by confidential written ballot. This means people can be honest about whether they want someone returning, without having to be publicly "not nice." Voice or hand votes almost ALWAYS guarantee that anyone standing for election or re-election will get voted in because nobody wants to be "not nice" and embarrass the candidate. Plus board chairs have to grow backbones. If a director is underperforming, or obstructive to the work of the board, or rude, or whatever, it's time for the board chair to meet with that director privately and inquire whether the board member is having any problems that are impacting their effectiveness on the board. If they aren't, give them specific instructions on what changes the chair expects to see in their behavior and fulfillment of the director's responsibilities. And if there is no change after a month or two, the chair needs to meet with the director again and suggest in the strongest terms that this does not seem to be a good fit for this director and the chair is sure there are other organizations that could benefit far more from that director's contribution than this organization, and strongly recommend they resign. If the director refuses to resign or reform, then the chair should let the director know s/he has no choice but to ask the Board to consider the removal of that director from the board. And, oh, if only it all worked so easily! Susan D. Smith, a Consultant in Philanthropy from Barneveld, NY, added: I've actually worked with Boards who use this approach and it seems to work pretty well, with no downside, save that the Board member who is being told "thanks and bye-bye" tends to be disappointed that he/she didn't get to have those consecutive terms. But, it should be understood by all on the Board that term limits don't automatically guarantee that everyone elected/appointed will get to serve each and every term possible under term limit rules. It's not an entitlement. Therefore, if the Governance Committee doesn't feel that someone who is coming up for re-appointment to a second or third term is the right "fit", they can recommend that the member be thanked for his/her service and not nominated for re-election. I've not seen a case where, when this sort of departure has been engineered, the individual has fought it or otherwise declined to leave. The non-renewed member usually knows deep down that he/she isn't fitting in or meeting expectations or whatever. And who wants to remain where he/she is not wanted? I agree that to treat Board dismissal the same as an employee dismissal, based on whether a member lives up to the expectations stated in a signed Board commitment letter, is asking for trouble. The analogy that Board service should have job descriptions, role expectations and performance review, just like paid staff, only goes so far. There is a point where, if you attempt to extend the analogy for Board volunteers to include things like progressive discipline or a grievance procedure if someone is asked to leave who doesn't wish to do so, it falls apart and becomes ridiculous. The dynamics of volunteer positions are different from paid positions. To treat board service in a like manner as paid staff is beyond what any volunteer should expect. It will also make it that much more difficult to find Board officers who will accept the responsibility of governing, and possibly will make it tougher for an organization to attract new Board members. That kind of "agita" no one needs in his/her volunteer life. Gayle L. Gifford of Cause & Effect Inc. (http://www.ceffect.com) contributed these comments: I happen to like three, three year terms. I’ve worked with boards and been on boards that have had all kinds of iterations, and I personally think that if the board is of sufficient size (I’m one of the few who likes boards of about 21 people) and one third rotate every year, that this is a good time line to keep outstanding board members and bring in enough fresh blood through sunsets, self opting out and some “failures to invite back.” Why else do I like 9 year term? Lots of significant organization change takes years to happen. Having leaders around who carry with them institutional knowledge and organizational history help to keep commitment to change processes moving. If you’ve got a ladder, which many organizations do, of officer leadership, 9 years helps identify and build solid commitment to mission and strategy, creates a stronger identification and continuity within the community around that leadership, allows board leadership to develop strong and critical political and donor relationships, allows time to cultivate and expose to the community the next generation of leaders, etc. etc. etc. I also agree that the only thing that will stop boards from the danger of the niceness factor is "backbone" or "courage." I stress repeatedly with boards that no amount of procedure can make up for courage, a quality of leadership required to be a good board and good board member. Now, I believe that individual fortitude can be buttressed by building processes that create collective courage – those things you’ve already done: active and ongoing board governance committees with careful nominations, orientation, training and performance measurement, members completing annual self-evaluations around a set of performance criteria, presidents having those critical chats with nonperformers, and a culture of excellence that members can immediately measure themselves against. Put Barber, editor of the Nonprofit FAQ, offered a different approach to term limits: I think a slightly more complicated formula can help boards find the right balance between turnover and retaining needed skills and depth of knowledge. The formula I've seen work goes something like this (though the specification of the lengths of the terms can vary depending on other things about the way the board works): New board members are elected for a three-year term. Toward the end of this first term, the Governance committee considers — and perhaps has a quiet conversation with the individual — whether a second three year term is in order. Usually it will be, unless there's a really bad fit. At the end of the second three-year term, though, that board member can only be elected for two years (if mutually agreeable). And then, at the end of the two-year term, the board member can only be elected for an additional one-year term (again, if mutually agreeable). Then, after these nine years, the board member can be re-elected for additional one-year terms for as long as everyone is comfortable with the arrangement. But the fact that the term is limited to one year creates a pretty strong suggestion that rotation may be good for the board and welcome for the board member, without any need to make "not nice" judgements that may strain relationships or damage morale. Posted 10/23/05 -- PB