Let’s have some Real Talk about board terms and term limits

May 21, 2015

At some point, all boards will struggle with the question of terms and term limits. These are incredibly important questions, but they are often fraught with emotion. In many cases, even the discussion of term limits can scare a long-serving board member.

So. Let’s talk about what board terms and term limits really mean.

Terms

Terms are simply a length of service. On most boards, a term is somewhere between two and six years, with three years being a pretty common average for a term length. (Two year terms are a little short, and terms longer than three years might make a potential candidate wary of committing for so long.)

Simply instituting terms gives no expectation that someone will leave at the end of their term. A board member who has finished the term has the choice to stay on the board for another term or to step down.

Every board should have terms.

The main reason I recommend terms is that they establish a set time of service for a volunteer:

  • Terms give a volunteer board member a chance to step down gracefully if they are burned out or ready to move on to a different board.
  • Terms mean that you have a better chance of planning ahead to replace needed board skills (knowing that career, family, and other outside forces can still pull a board member away mid-term).
  • Terms mean that a small group of board members will likely step down at the same time, meaning that new group of board members will join at the same time, allowing for easier board orientation.

If your board does not have term limits, you really should implement them immediately.

Here’s how:

First, you’ll have to amend your bylaws. It’s an easy fix: “Board members shall serve terms of three years.” Boom, you’re done.

Next, divide your board into thirds. At the beginning of the next fiscal year, deem one third of the board to be in their first year of a three year term, one third to be in their second year, and one third to be in their third year.

If you don’t have term limits, it shouldn’t matter which board member falls into which area. But if you think board members might care, you can draw lots in front of them at a board meeting to make it clear you’re not intentionally putting someone at the beginning or end of a term.

Essentially what you are doing is creating a “seat” on the board that has a clear term tied to it, regardless of who is in that seat today. If a board member leaves mid-term and you install a new person into that seat, they still have the same term as the original board member.

In this way, no more than one third of the board could decide they are done at the end of their term at any given time. Most likely it will be even less than that, but by staggering terms, you can prevent the nonprofit from having a suddenly overwhelming majority of newbie board members.

Term Limits

After you’ve implemented terms, you need to give some thought to term limits.

There are some really good reasons to consider term limits:

Term limits help a board stay current with changing times. What worked ten years ago might not work now, but it often takes new people with new ideas to realize that, rather than simply people changing their minds.

Term limits help prevent an individual board member from accumulating too much power over the rest of the board. As a new board member, it’s hard to argue with someone who’s been on the board for twenty years. Board members who have been there that long will often just get their way because no one wants to argue with them.

Term limits allow a board to grow in experience, vision, and financial capacity—especially the board of a small nonprofit. What started out as a group of engaged volunteers with a dream could grow to become a community institution with stable resources and a big impact. But it’s hard to get there with just the original group of volunteers.

Term limits help prevent board members from getting tired. Even on committees or boards I’ve loved, I’ve often been quietly relieved to term out and step down. What you personally get out of an organization as a volunteer board member can slowly start to decrease over time. Eventually board business might all start to feel like stuff you’ve been through before. Maybe you became a little cynical, maybe the excitement is gone, and you just feel that you’re just looking over budgets all the time. Term limits help prevent burnout.

Term limits remove board member guilt. Board members don’t have to feel bad about being burned out or about wanting to move on. They can end their time gracefully.

Here is one example of how you add term limits to your bylaws. After spelling out the terms for board members, the bylaws could say:

These terms are renewable, but no person shall serve more than two (2) consecutive full terms.

And that’s it! It’s such a small change to the bylaws… and yet it’s often a massive hurdle to implement. The problem is that the organizations that need term limits the most are the least likely to adopt them.

Addressing fears: losing good people

One of the most common fears about term limits is that it will bump good people off the board and that the organization won’t be able to replace them with equally good board members.

Let’s look at this head on.

First, yes—someone who has served several years on the board may not be “replaceable” in that you can find a new board member with that board member’s exact skills to fill their seat. But that’s a false promise. You aren’t actually trying to replace them.

Remember a board should have diverse and complementary skills. Someone with years of institutional knowledge and background is part of that mix, but only one part. I guarantee you that if that person steps down and is replaced by someone new (who doesn’t know nearly as much) other board members will fill that gap. Board members step up who wouldn’t have otherwise. The changing roles will help keep those board members interested and engaged too.

Second, term limits mean you do have to do more work to keep the board refreshed. A healthy nonprofit should find the board improves as it goes. Board members should get a little wealthier than previous board members. Board members will join with better skills than previous board members. This is how it works. If you don’t have a bench of donors, volunteers, or other people close to your nonprofit who could become good board members, that’s a bigger issue than just term limits.

Finally, check yourself. Is your fear that someone will not be able to replace a veteran board member, or that the new board member will want to do things differently? Maybe it’s true that a veteran board member knows how to do something better than anyone else. But it’s also true that a new board member might see a whole different solution that requires everyone adapt just a little bit. This is often generational (a Millennial replacing a Baby Boomer for example) but it doesn’t have to be. Anyone new coming into a group that has settled into a routine threatens to disrupt the routine. Don’t be afraid of it. Embrace it!

That’s the energy that will keep things moving.

Addressing fears: how does the term-limited board member feel?

The hardest part of this discussion is handling it in a way that doesn’t make a veteran board member feel like he or she is being elbowed off the board. That kind of a dynamic can make some people dig their heels in and fight, and it can make others resign in a fit of protest—possibly pulling their donations as well.

So let’s be clear: sometimes people like to stay for years and years on a board. The feeling is there, and even if it’s not the best idea for a nonprofit, we have to acknowledge it and work with it.

Why do people want to stay so long?

Maybe they founded the organization and believe they are irreplaceable (or believe that they are protecting the organization’s roots from people who want to go in a new and scary direction). Maybe they have a profound sense of self-identity tied up with their position on the board. Maybe they are a major donor and believe that they are entitled to a position on the board. Maybe they simply love the organization and want to stay as close to it as possible.

Whatever the reason, even bringing it up can create bitter feelings in those who would be forced to term off the board. Here are some ideas that might make that transition a little easier:

Create an emeritus board

This option might be a good one for nonprofits that want to keep good donors close to the organization. They create a much larger council of the best donors, previous board members, founders, and more, and use them as a sounding board for important issues.

For example, I sat for a four-year term on the alumni council of my college. We met twice a year and had some responsibilities—you don’t want to create a group that truly does nothing—but we didn’t have the legal and fiscal oversight of the college. Your nonprofit could consider something similar. Board members who are termed out might be happy sitting on a group like that.

Deem every board member to be in their first term

While I was the director at the Grand Cinema, the board implemented term limits, but used this caveat: everyone was considered to be in their first term. This put all board members onto a level playing field. People who might have been termed off the board in one year instead had four years remaining on the board, or more.

If I recall correctly, this passed unanimously, even by people who had been on the board for many years. If this compromise makes it possible for your board to implement term limits, it’s a good solution.

You can either draw straws to get a staggered board rotation started after doing this, or ask for preferences and then sort it out as a committee.

Hire an outsider

There are a variety of consultants who can help lead a board on issues like fundraising, governance, capital campaigns, strategic planning and more. They can be useful for addressing topics that might be painful for some to discuss—like term limits.

If the newest member to a board brings up term limits, the longer-serving board members may feel that they are being edged out. But a professional consultant who opens a discussion about term limits by framing it “good governance” will likely get a better hearing, without seeming personally motivated.

After that initial facilitated discussion, it should be easier for a board or a governance committee to address the issue.

When shouldn’t you have term limits?

Are there any examples of small (or very small) nonprofits that shouldn’t have term limits?

Yes. Sometimes very small nonprofits are just a group of volunteers who are trying to make a difference. When they’ve filled the need, or when the group dissolves, the work of the nonprofit dissolves. There’s nothing wrong with that. A lot of the recommendations of policy may not apply to them, including the decision to institute term limits.

But if that group of volunteers wants the nonprofit to last past the group’s own direct volunteer work, then all of these are important, including term limits. It’s through these policies that the nonprofit can endure, even after the founding volunteers are ready to move on to something else.

Here’s another example of when term limits might not be worth the fight: when dealing with a very generous board member. Some nonprofits have a single donor whose capacity for giving dwarfs that of the other board members so much that, without this donor, the nonprofit might cease to function. Such donors should give without having to be on the board, and they should recognize that by operating this way they are holding back the organization over the long term. But they may not. And that’s an awfully hard person to imagine approaching about this idea.

This nonprofit should have term limits, since it very much needs to diversify the funding streams and the number of people who care about it. But I wouldn’t blame a board member who decided not to pick this battle at this time.

Would you like more tools to help your board improve? It makes the day-to-day job of an Executive Director much easier to have a board that is functioning at their highest capacity.  Download a free preview of “The Little Book of Boards” and get the first chapter covering the basics of board responsibilities. This might be perfect tool to get your board back on track!

Comments are closed.

For Small Nonprofits © 2016