A term limit policy identifies the maximum number of consecutive terms a board member can serve. While by no means universal, the use of term limits is a common governance practice. Among independent institutions, 64% have term limits, and among public institutions, 41% use this practice. The term limit policy, as well as the length of each term, should be clearly defined in the board’s bylaws.
The Pros and Cons
The line is pretty clear between those who support the use of term limits and those who don’t. Critics of term limits say that these policies deprive a board of expertise and institutional memory. Others worry about the loss of engagement when a trustee leaves the board, especially if he or she has been particularly generous to the institution. They also point out that term limits result in the need for constant recruitment of new board members, putting a strain on the Committee on Trustees.
Proponents argue that term limits are a healthy way to infuse the board with new ideas and new energy. With term limits, they say, a board has a regular opportunity to ensure it has the range of skills and experiences it needs. When a new candidate is found, it can be easier to add him or her to the board if there are term limits. Term limits also provide a graceful way to rotate ineffective members off the board.
2010 Survey Data for Boards of Public Institutions
- 41 percent of public boards have term limits. This represents a 25 percent increase from 2004.
- The average number of consecutive terms allowed is two.
- The average length of a term is 5.7 years.
2010 Data for Boards of Independent Institutions
- 64 percent of boards of independent institutions have term limits.
- The average number of consecutive terms allowed is three.
- The most common length for a single term is four years, approximately the same as was found in AGB’s 1997 and 2004 surveys.
- Among boards with term limits, 90 percent allow a trustee who has served the maximum number of terms to serve again after a hiatus of one year.
Implementing Term Limits
If your board doesn’t have term limits but would like to implement them, there are various strategies for doing so. For example, once a policy has been created, some boards hold a drawing to determine the term lengths of existing members, with equal numbers assigned one-year, two-year, and three-year terms. This establishes a regular rotation that will naturally occur once the policy begins to be implemented. Others grandfather existing board members, but begin term limits with newly appointed members. Whatever the process, make sure that it’s clearly explained and discussed in advance of implementation.
Assessment Individual Board Members
It’s good practice to assess individual board members on a regular schedule. This becomes a critical practice in the absence of term limits. Board members who can serve for an indefinite length of time need regular feedback on performance, and the board needs a mechanism to bring poor service to an end.