While the IRS allows for unlimited board service, there are several reasons why chambers consider term limits for board members as a “best practice.”
In this article, we’ll cover some of the most important points for both sides and give you some ideas on how to navigate the issue.
The Term Limit Conundrum
The problem in instituting term limits if you have not had them before is that you must go through the very people (i.e. incumbent board members) who are impacted by the bylaws (or law) to change them. And that’s not an easy sell. So how do you institute change when the people who would do it are the ones most affected? Very carefully and with good support.
Why Should the Chamber Have Term Limits for Board Members?
First, let’s address why chamber board term limits can be a good thing for your chamber. Whether we are talking about your chamber board or Congress, it’s easy to see why new members can be beneficial even when you factor in the learning curve. When you bring in new people you get new ideas, talents, skills, leadership, and experience.
Term limits also:
- Ensure people remain fresh in their service.
You don’t want board service to become a tiresome grind. When you bring in a new person, there’s generally a honeymoon period where they are excited about the opportunity and the possibilities. That energy is contagious.
- Create a more diverse board.
A forced turnover means you can ensure you have a diverse board composition so that more voices may contribute. This fits not just for ethnicity and gender diversity but also new types of businesses (or industries may be represented on your board that may not have existed in your area ten years ago).
- Safeguard against cliques.
Cliques were annoying in high school and can be even more limiting in chamber leadership. When board members serve together for years, they can become “of one mind” limiting anyone’s ability to do something new unless they agree with it. This restricts innovation.
- Keep your committees fresh.
If your chamber board members chair or serve on committees, limiting their terms can bring the same freshness to your committees that rotation does to your board.
- Improve group dynamics.
We are all creatures of habit and when people have been working together for years they may repeat the same roles, arguments, or ineffectual grievances. Bringing in new personalities can alter the group dynamics.
- Ensure that everyone leaves (at some point).
Building off of the group dynamics point above, sometimes you just need a change. A board member may become combative, may not see they’ve done everything they can for the organization, or the chamber may need to move in a new direction that the board member can’t help them do. Just as a company may remove a director of marketing or sales or even a CEO when the organization wants to explore a new way of doing things, term limits can provide chambers the same “peaceful transition of power” without hurt feelings.
- Adjust to changing needs.
Just as many of us had to pivot during COVID, creating term limits allows the chamber to easily adjust to changing business needs. As you innovate and enter different stages of the chamber’s life, you may need direction and leadership for specific challenges and opportunities. Term limits make it easy to have the openings to recruit for what you need to thrive in the ways you need to grow.
The Case to Not Have Term Limits for Board Members
Even with the many reasons to implement term limits, there are still some stalwarts that support allowing interested volunteers to continue their service in perpetuity.
The main reason for their logic is experience.
Experienced board members bring a lot to the table. They understand the chamber, the community, and what it’s like to work with the systems in place. They have built relationships and (should) understand the strengths, weaknesses, and opportunities the chamber has.
When you bring on new board members, you run the risk of losing the expertise of the old. For instance, one board member may be very well-versed in marketing. If they leave, will a new board member be able to help with that?
While everything should be written down at your chamber (from protocols to bylaws), sometimes board members have institutional knowledge that others do not such as why an event was sunset or why you always host the golf outing in the fall.
How to Gain Support to Change the Bylaws
If you think you will have a fight on your hands to update your bylaws to implement term limits for board members, do your research. If you’re a member of ACCE you can research information on bylaws or request “best practices” on term limits. This is a benefit of membership. Board members are often persuaded by communications from ACCE as opposed to advice from the “neighbor chamber” or stories that begin with “in my previous chamber.”
You can also consult with a nonprofit attorney or someone who works on board structures to get their advice. Organizations like BoardSource (which specializes in nonprofit boards) also have articles on the topic.
Next, don’t make it personal. Make sure they understand this is a sweeping change that affects everyone, not one board member. It isn’t a way to “get rid of someone” (even if it is).
Find someone on the board who will support your efforts, preferably your board chair.
Research the terms for similar chambers to yours. The Bangor Region Chamber of Commerce, for example, has term limits that consist of 3-year terms with a maximum of two terms unless the board member is an officer (chair, chair-elect, treasurer). The term is extended for those roles. The chamber uses a board matrix to ensure it has representation from various sectors, experience levels, and diversity.
When considering instituting changes to your bylaws on board term limits, you’ll need to propose a board member term, an allowance (or disallowance) for consecutive terms, a mention of how many years you need to be off the board before you can return, and if there are any exceptions to this proposed changes as in the case of a board chair. You may also want to consider what role a chair is eligible to play after they have termed out. For sinatnce, can former board members serve on or chair a committee?
Finally, how will staggered terms be handled? You do not want your entire board to term out at the same time. Most board consultants suggest no greater than 1/3 of your board should refresh at one time.
Staggered terms provide a nice compromise between retaining insider knowledge and gaining fresh perspectives. It allows for an easier transition and creates an environment of learning for both seasoned and new board members.
What are you currently doing at your chamber? Share your insights about board term limits here.