Board Tenure: Can You Serve Too Long?

I just received an email asking if there are generally accepted limits on how long an individual should serve as a Board member. Interesting question. Because from my perspective, tenure is indeed an issue.

There are a few criteria that need to drive Board composition, the most important of which is governance competencies of individual Board members. By that I mean that Board members should be bringing skills to the table that help fuel Board effectiveness – strategic planning, policy-making and effective decision-making are good examples of the skills Board should be seeking among their members.

But beyond that, the other goal should be to ensure that Board composition is reflective of the composition of the individuals it seeks to serve. Frankly, I often wonder how a Board comprised of soon-to-retire baby boomers can possibly ensure the organization is adapting to the changing demands of the younger generation who work, network, find and exchange information in an entirely different way than we boomers did not so long ago.

It seems relatively easy to find research on Board composition on the corporate side that specifically addresses tenure. In fact, major corporate ratings agencies appear to give lower ratings to Boards comprised of members who have served long periods of time – put another way, those Boards in the corporate sector comprised of individuals with varying lengths of service tend to rate more favourably in the eyes of rating agencies.

So, why is this the case? The first thought that comes to mind is the tendency on the part of individuals with long tenure, or groups of individuals who served together for a significant period of time, to resist change and to embrace the status quo. That is no doubt because they had a stake in building it.

I don’t think there is a hard and fast rule that can be applied to Board tenure in the not-for-profit sector. But what seems to be commonplace are staggered terms (i.e. two or three year terms, with the option of re-election for another one or two terms). This approach ensures continuity (i.e. not everyone is up for election each year), gives newcomers a chance to get oriented and become productive Board members, and makes it clear to everyone at the outset that there is a limit to Board service. In some cases, the by-laws allow for individuals to return to the Board after a certain time frame (i.e. two or three years).

And I know from experience that it is difficult for some members of the Board to suggest to others on the Board that it might be time for them to move on. Term limits eliminate the need for those uncomfortable discussions, allows Board members to leave with dignity, accompanied, hopefully, by recognition for their commitment and contributions to the organization. That’s a win for everyone, most importantly, the organization the Board governs.