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Term Limits: Only 'Perfect' Boards Can Do Without Them

Term Limits: Only 'Perfect' Boards Can Do Without Them
by Michael Wyland
Partner, Sumption & Wyland
(featured in “The NonProfit Times” 2/1/2003, page 12)

Alice Korngold admits in her essay, “Term Limits: Only Dysfunctional Boards Need Them” (NP Times FME, 10/15/2002), that her view is contrary to current "best practice" in board operation. I believe that the practice of term limits for nonprofit board members is sound, given the realities of nonprofits and board service as well as the many benefits of the practice for organizations, their boards, and their board members.

According to 2002 BoardSource and IRS figures, there are over 1.5 million nonprofit organizations in the U.S. (over 800,000 501(c)3's alone) and over 17 million nonprofit board positions. Most of these organizations are relatively small, locally based groups with heavy participation by volunteers and limited staff support.

As much as I'd like to believe that all these organizations and volunteers would become, or could become, in Ms. Korngold's phrase, “high functioning,” most will fail to achieve this goal due to lack of knowledge, lack of application, lack of passion, lack of time, or for any number of other deficits. The many thousands of staff members who support these volunteers and serve these organizations may, from time to time, share one or more of these same deficits. Even those nonprofit boards that achieve this lofty summit will be challenged to sustain high function.

Do these deficits make nonprofit boards “dysfunctional?” Perhaps, in the sense that a departure from optimal function constitutes “dysfunction.” Of course, using this definition, all of us are “dysfunctional” in one or more ways, and the organizations we serve -- however purely, diligently, and well -- can't help but be affected by our “dysfunctions.” In short, we're human, and the organizations we create and support are influenced by our humanity.

Just as, in part, laws are instituted in society to help guide good citizens on proper conduct in case they might stray, formal practices such as term limits help guide nonprofits, their boards, and their board members in proper conduct when leadership may falter in its adherence to high function.

Term limits do more than force the departure of dysfunctional board members. They also protect all board members from nonprofits that would seek to retain them by appealing to a sense of “duty” when the individual is ready to move on. In fact, many current and prospective board members are reassured that the specific commitment of board membership is guaranteed not to be a lifetime one.

Term limits also protect both the board member and the organization against stasis. They are emblematic of a formal process for assuring the periodic introduction to the organization's governance of new energy, new viewpoints, and diverse skills. For the board member, term limits are the assurance that their service is valued, though limited, and that the unique leadership they bring to one board will be freed to serve the nonprofit in other ways, and to serve other boards or other pursuits.

The practice of many boards to allow a term-limited member to rejoin a board after one year has been referred to as a “circumvention” of term limits. It's rare for a talented, engaged, and necessary director to be term-limited out of office in such a way as to leave the agency in trouble. When the nominating committee is doing its job, such situations are unheard of. One aspect of a dysfunctional board is when the board member recruitment and leadership development process is lacking. It would be reasonable to ask why a talented board member would seek to remain on a board deficient in such capacity, or why a high functioning board would wish such a person to remain when such dysfunction was tolerated during their board service.

In the perfect nonprofit world, all boards would be high functioning, with committed, educated volunteers and staffs proficient in board governance. In our nonprofit world, there is a proliferation of nonprofits that govern their work in relative obscurity and struggle to recruit the best members from an often limited pool of applicants. The presence of these real-life limitations argue for guideposts, standards, and policies such as term limits to guide boards toward the best practice that few nonprofit organizations can achieve without such formal structure.