One of the main duties of the board of directors is to elect new board members and executives. Each board has its own rules about board member term limits, which are spelled out in the bylaws. However, it turns out that most nonprofits do not have term limits, i.e., a fixed time when a board member must resign. In this article, we’ll look at the specifics of nonprofit board term limits and why it’s so important to have them.
What are term limits, and what are they?
A term is the amount of time board members have to serve in their position, all the details are in the articles of association of the organization. If we are talking about non-profit organizations, there are usually two or three years of service. But, the statutes do not specify a limit on the number of consecutive terms, and in fact, the same member can be elected to his position an infinite number of times. But whether these actions are reasonable is another matter. In commercial companies, the terms are much longer, and when a member becomes a board member, he is elected for 10-15 years.
Experts recommend that companies use a staggered term system to make it easier for them to balance the number of new and old board members. That way, the company would have fresh ideas and perspectives, but at the same time leave behind experience and mentors.
What is the maximum number of years a board member may serve
As mentioned earlier, the bylaws of a nonprofit organization do not set a clear limit on how many times they can be re-elected to the same position. However, this does not mean that the composition of your board should not change at all, because in this way you risk losing relevance and effectiveness in decision-making and going into stagnation. It is recommended to take a board member for two terms – three years each.
Below we’ll highlight the main benefits of term limits: -Changing members will allow the board to meet many talented people who can make an invaluable contribution to the job
- Term limits promote diversity on the board, allowing fresh ideas and new perspectives to develop the company
- Limits the risks of unproductivity, boredom, loss of enthusiasm, and poor management of responsibilities that can occur if the board has not changed for a long time
- Prevent the formation of a dominant and privileged group of individual board members that would suppress and hinder the development of new members
- Provides you with a fixed and continuous pattern of turnover
- Improves and accelerates the dynamics of change on the board
- Gives you a good reason to remove passive and unhelpful members
It is necessary to remember that there are exceptions to every rule, so, for example, in some non-profit organizations a long period of participation in the board makes sense. Some of them are:
- Church
In those types of churches where the upper governing body is the elders, the authority only changes when the person can no longer physically perform his or her duties.
- Micro-charity organizations
In small nonprofits, board changes are quite rare because there are also few people willing to step into the position.
- Entrepreneurial nonprofit organization
These types of companies are characterized by their unique goals and operating principles, in which the experience and individual vision of the founder play a significant role. Therefore, the founder of the company and the board, as a rule, remain unchanged in such organizations.