Time and again, board chairs and Executive Directors (EDs)/CEOs lament the challenges they face when attempting to move their organization forward. Having a strategic vision and a mission is only half the battle. Accomplishing their goals is the most essential responsibility facing the leadership group, yet this is often where the battle begins.
Building a Powerful Board
The Board of Directors for a nonprofit has a vital role to play in achieving its short and long term objectives. That’s why it is so important to carefully identify, recruit, select and train the right people. As Jim Collins’ commented in Good to Great, every nonprofit needs the right people in the right seats on the bus. Many nonprofits invite candidates to join their boards based on friendship, convenience or even availability, rather than a thoughtful, objective process.
Early on, when launching a nonprofit it is easier to pick colleagues to help the group get off the ground. But as the organization matures, it is important that the board matures as well. Smart leaders go out of their way to establish criteria for future board members, seeking out specific skill sets. For example, does anyone bring marketing, financial experience or a legal background to the table? The group may also look for specific well-regarded companies in the community when searching for representation. There may be a bank official, corporate CEO, or small business owner who would add value and prestige to the board who should receive consideration. No matter who – or how – the process of building the board occurs, it should focus on diversity and quality.
Imposing Term Limits on the Board
Once selected, the board members can add real value to the nonprofit by sharing ideas, suggestions, relationships and resources that drive the success of the group. However, few board members can remain relevant forever. And this is where term limits come into the discussion.
There are many reasons for instituting term limits, and just as many for ignoring them. It is an emotion-charged issue with reasonable arguments coming from both sides of the aisle.
There are reasons not to impose term limits:
- The organization does not want to lose the experience of the board member.
- The organization does not want to lose the institutional knowledge and historic perspective of the long time board member.
- The organization does not want to lose the generosity of this board member.
- The organization is not convinced they will find a new board member who will be a suitable replacement for this long time, deeply committed board member.
These considerations have importance and cannot, and should not, be taken lightly. So why even consider turning over board positions when there is much to lose by doing so?
There are reasons for imposing term limits:
- Without official, formal limits, it is almost impossible to terminate a troublesome, negative or underperforming board member.
- Fresh ideas generate when new people ascend to the board level. Which brings a unique perspective that surpasses status quo and invigorates the group.
- When the board doesn’t have ‘turnover,’ no room exists for new people to fill vacating seats. As such, there is little incentive for anyone joining the group to get involved; since there is no path for progressing into a lay leadership position.
- When term limits exist, board members are aware from the outset that they have limited years to make an impact. This encourages them to make a difference early on. And also avoids the lack of productivity and burnout that comes from too many years without any legitimate exit strategy.
- When board members do not rotate, the same ‘clique’ remains in power for years, possibly limiting growth, vision and direction while embracing the mantra, “We’ve never done it that way before.”
- Term limits enable the board to expand its competencies and being more inclusive within the community it serves.
Being Sensitive to the Emotional Challenges of Term Limits
In a 2010 survey conducted by Board Source Nonprofit Governance, 70% of the nonprofits responded that they have term limits. Recognizing all the legitimate reasons for avoiding term limits, there is much more of a trend recently toward enforcing planned, staggered succession through term limits. The dangers that lurk in keeping board members until they are ready to retire is that most do not ever reach that conclusion on their own.
No one wants to approach a seasoned board member with the suggestion that they move off the board. After all, the fear of the board member’s potential anger, embarrassment, resentment and disappointment gets in the way of good judgement. This is the case even when the board member doesn’t attend meetings regularly, make a meaningful financial contribution, or even consistently open doors for the group as an ambassador. Human nature would suggest to avoid confrontation even when warranted. But term limits eliminate the emotional, personal elements inherent in the decision. The by-laws are there to signal to all board members that there is a limit to their service. And it is applied equally to all, giving preference to none.
While embracing the status quo is comfortable, it is rarely the best strategy for sustainability over time. Whether the nonprofit is considering offering new services, expanding its geographic footprint, tweaking its mission or seeking diversity in gender and generational representation, for any new approach to succeed, the board needs to let go of any ‘sacred cows’ it holds dear. Unfortunately, the longer volunteers sit on a board, the more entrenched, inflexible and close-minded they become.
Although this may not occur with every long-time board member, it is observable and predictable behavior in most situations. It just makes sense. If a board member first proposed the idea of a golf outing fundraiser ten years ago, when the event begins to have less of a return on investment, drawing on the organization’s resources without generating the revenue it once did, that same board member will most likely be very reluctant to see the golf outing terminated. Relinquishing control is tough – and it gets more difficult over time!
Encouraging Retiring Board Members to Accept a New Role
There are good reasons for maintaining effective and contributing board members for as long as possible. But the price a nonprofit pays by refusing to have term limits may be too much. Instead, suggest that retiring board members receive a re-assignment to an ‘advisory board’ role. This allows for continuing contribution and engagement. But at the same time opens up the board to new, dynamic members who can add value and raise the bar to the next level.
