Eight Reasons Why You Need Term Limits
Ah, term limits. Few things get a group of nonprofit leaders quite as riled up as the topic of term limits. Some of the reasons we have heard given in opposition the use of term limits for a board of directors include:
- Loss of institutional memory, expertise, and/ or a major financial supporter
- Scarcity of suitable board members to replace term limited members
- Opportunity cost (i.e., the time and effort needed to continually recruiting new members could be spent on other, better things)
While these arguments may have some merit, we are in favor of term limits for governing board members because the benefits outweigh these costs. Term limits are intended to keep the board representative of and responsive to its community, aware of and implementing appropriate new strategies to meet the mission, and focused on what is best for the organization. Reasons (and benefits of) term limits include:
1. Term Limits Uphold the Public Trust
A nonprofit organization holds a public trust to achieve results towards its mission to the very best of its ability. Many nonprofits are started by a small group of people who are passionately dedicated to the cause. But as soon as the organization incorporates, it is no longer their own small initiative or special project (even though it may meet around someone’s dining room table). It becomes a corporate, public benefit business and term limits ensure that new board members regularly enter the organization to maintain focus on the mission on behalf of the public trust.
2. Term Limits Undercut Dictatorships
Rotating board members and officers keeps any one person or group of people from holding sway over the organization. Boards often say that because someone leaves the board every year or two they do not need term limits. But often they don’t acknowledge that an individual or small group of people has not rotated off the board voluntarily and maintains control. This is an especially important reason for term limits because nonprofit boards typically are loathe to not have unanimity in decision making. This dynamic can easily lead to one or a few people holding significant power to quash proposals they don’t like – often without making it obvious that they are blocking change.
3. Term Limits Broaden Thinking
New board members bring fresh ideas to the board or to old ideas that did not work in the past, but whose time has come. An example would be experience with new evidence-based best practices or new ways to connect with businesses or workplaces that might support the organization’s work.
4. Term Limits Expand Constituency
New board members may bring representation of new constituent groups to the board, for example, different age or ethnic groups, emerging stakeholders, or local community members.
5. Term Limits Ensure Appropriate Skills
Term limits require board members to regularly assess what skills, abilities, networking connections, etc., are needed to advance the organization’s mission and to routinely look for potential candidates to meet those needs. Purposefully recruiting board members to meet the organization’s needs requires communication with the community about what the organization does, etc. – it’s a good outreach tool!
6. Term Limits Signal Openness
Making room on the board for new members demonstrates to your community that you want community engagement, ideas, and leadership. As one of our clients said, we want people competing to be on our board! Also, an organization’s representation in the community increases as the population of past board members grows.
7. Term Limits Lessen Burnout
Term limits give board members a break from service. People often are uncomfortable saying that they need a break from the demanding work of serving on a nonprofit board because they don’t want to appear disloyal. And many leaders are hesitant to leave a position if they feel there is no one to come after them and pick up the load (and if recruiting new leadership would run counter to the existing organizational culture).
8. Term Limits Thin the Deadwood
Finally, and as a last resort, term limits get rid of nonperforming board members who won’t leave the board any other way. This is often thought of as the principal reason for term limits, but it’s not. If being term limited is the only way you can get rid of a nonperforming board member, someone has not done their job of managing the board. The Executive Director and Board President should work together to manage the board, with the board being as responsible as possible for its own self-management.
Keep in mind that a person’s self-esteem and sense of belonging to the community may be an important part of their service on a nonprofit board. Their service must be sincerely acknowledged and, if appropriate, they should be invited to participate on a committee that has external members or engaged in one or more activities of the organization (e.g. major donor committee formed by past board members, lands committee, or an upcoming special event, chair of the capital campaign committee, etc.).
Term limits often allow for a past board member to return to a board after a year or two off and reset the clock on term limits. One year is okay, but two would be better. A returning founder or early board member can substantially change the dynamic of the board. The deference given to founders or near-founders can inhibit growth and advancement of the organization and the closer the returning member is to her last term of service, the more likely this is to occur.