Q. Term limits are a bit of a testy question with our board, maybe some outside experience will help, do you have any suggestions?

A. The question of term limits, as with mandatory retirement, is a tricky one.

Both of these mechanisms have been used traditionally to ensure a reasonable degree of turnover on the board and its chair. Their advantage is to promote refreshment of key leadership positions, which in turn brings fresh perspectives and ideas to the organization, and broadens out the experience and skills of other board members.

Their primary disadvantage is that they are "blunt instruments", i.e. they arbitrarily and summarily deal with board members and chairs when they reach a certain point (length of service or age) regardless of how well they are contributing to the organization.

A preferable instrument would be board and chair evaluations, where the contribution and performance of the chair and individual board members is assessed periodically, often every 2 years, before the annual meeting, nominating and officer election process. In this case, strong board members and chairs are recognized and kept on longer, moderate board members and chairs have an opportunity for development and improvement as gaps are identified, and weaker board members and chairs are moved on without waiting out a term limit number of years.

So, the primary instrument should be evaluations, not term limits.

However, term limits may have a place, particularly in boards where well-performing chairs have served for many years and there is no other mechanism to encourage turnover (i.e. even an evaluation would not result in this.) It is not healthy for organizations to have the same leadership indefinitely, particularly as we face an era of increasing change. There is a strong sense that there is a "right" length of service for chairs and board members, i.e. beyond which there is diminishing value added. That is why so many organizations continue to use a term limit even after they adopt evaluations.

This "right" length of tenure cannot be pinned down exactly, as it depends on the situation, the skills of the chair and their character (ability to adapt and innovate), the experience and performance of the CEO, the depth and turnover of other board members. In many cases, however, this "right" length of tenure is in the 6 - 9 year range. When one calculates term limits, there is usually one term limit for board service, then the "clock" would start again when someone becomes chair, so one could serve for 18 years or more on the board, but only 9 as chair. There are also consecutive and lifetime term limits, i.e. board members and chairs can take a year off and then be eligible for office once more.

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