Principle 17: What’s the Limit?

Keeping it Ethical is our weekly blog series highlighting the 33 Principles for Good Governance and Ethical Practice. Throughout the series, we hope to highlight the importance of each Principle, the helpful resources associated with it, and learn more from you about how you’ve incorporated these Principles into your charitable organization.

We’ve all heard the saying, it’s possible to have too much of a good thing. The same could be said of board members – no shade intended. Sure, every board member is critical; they bring their own unique value to the table, but it’s not always healthy to have the same director serve for years, even decades.

Enter, the long-debated issue of board member term limits.

Fun fact: Federal and state rules remain eerily quiet on the board limit debate and do not regulate how long any person may serve on a nonprofit board. There are some states that establish the length of a term if it’s not articulated in the organization’s governance documents.

Less fun fact: Folks quickly pick a side on this debate, usually based off their gut reaction to what they may be losing or gaining when it’s time to act on setting term length and limits.

Let’s take a deep breath and consider two grounding components to hopefully keep that fun and wonder of board governance alive:

  • It’s not one size fits all. Prioritize the unique needs of your organization and its mission. With so many charitable organizations in our sector, what may make sense for a large nonprofit may be completely irrelevant for a family foundation. There are pros and cons for each side and it usually involves a compromise.
  • Write it down. Wherever your organization lands on debate, the policies and procedures should be codified in either the organization’s articles of incorporation or bylaws. We’ve discussed the importance of properly evaluating the board to keep your organization on track, so if you ever need to resurface the concern you’ll have the opportunity to sneak in the conversation.

There are a litany of articles out there to help break down the pros and cons of term length and limits. Here are a couple of great resources from our partners at BoardEffect and BoardSource that discuss best practices and house handy checklists.

There’s no disputing that adoption of term limits in our sector is on the rise. The latest Leading with Intent report tells us that it has become the norm, with 72 percent of boards putting limits on the number of consecutive terms a director serves. Many organizations see the potential of using term limits on a policy level as an important lever to strategically further diversity and equity on an institutional level.

We’ll leave you on a note of encouragement: don’t forget to nurture your relationship with board members who have termed out. After all, you may consider them for re-election down the line and at a minimum should leverage them as strategic assets through engagement on an alumni council or honorary board.

Wherever the conversation takes you be sure to give yourself some credit for interrogating the gray space with leadership on the topic.

Hats and bonnets off to you! We’re wishing you all the luck in moving from conversation toward alignment on reaching the limit that works for you.

Learn more about Principle 17 and the associated resources.

Types: Blog
Global Topics: Ethics and Accountability
Focus Areas: Principles for Good Governance and Ethical Practice