We are a small non-profit that runs a performing arts center. In up dating our by-laws, its been recommended that we establish term limits for our directors and officers, as well as a formal nominating committee. Do we really need such formalities? We\u2019re very small and don\u2019t have any other committees. Can\u2019t the board itself select its own members and officers? And it seems a mistake to force directors to leave when they are willing to continue to serve on our board. What do you recommend to your clients?<\/em><\/p>\n While I am a strong advocate of fixed terms, I never recommend term limits for board members. Why? Because among the most challenging aspects of running a successful non-profit is finding and keeping healthy board members who, whether through wealth, work, or wisdom (or a rare combination of all three), contribute to the success and productivity of the organization. Once you are lucky enough to find then, the last thing you want to do is force them to leave! However, at the same time, you need to have a mechanism through which malignant board members can be removed. Such members, if left to metastasize, can quickly chase all the healthy ones away, burn out the staff, and poison the entire operation. Fixed terms without term limits provide you with the best of both worlds.<\/p>\n Let\u2019s say, for example, that the by-laws provide that each board member serves a term of 2 years. At the end of each board member\u2019s term, the nominating committee is required to review the board member and recommend either that the board member be invited to serve another term or be invited to exit. By having terms, but no term limits, there is no limit to how many terms a board member can serve, but there is also a fixed time after which every board member\u2019s service can be reviewed. While you can pick any term length you want, I usually recommend no longer than 2 \u2013 3 year terms for board membership. (Anything longer and you start losing the effectiveness of early detection and prevention!) There are also ways to stagger terms so that not everyone on the board is up for renewal at the same time.<\/p>\n Term limits for officers, on the other hand, can be more appropriate. Why? Because with no term limit, even a beloved president or board chair can quickly become a feared dictator that no one wants to cross, or, just as worse, a benevolent, but ineffective leader who spurns all attempts at growth or change. At the end of the president\u2019s term, he or she can still serve on the board, but no longer gets to wield the mace of supreme authority. Also, in my experience, I have also found that the people you most want to serve as board president or chair will be those who do not want to serve more than a year whereas those you want to avoid are those who are looking for a life-time appointment.<\/p>\n As for whether or not you need to have a formal nominating committee, its a recommended practice to have the formality of a separate nominating committee\u2014if not at first, then certainly as your board gets bigger. The nominating committee does not make the actual decisions, but, rather, makes recommendations to the board of whether or not to ask existing board members to renew their terms, as well as reviews and makes recommendations for the nomination of new board members. While the board is always able to accept or decline such recommendations, having a nominating committee allows a forum for such discussions to be \u201chashed out\u201d other than in a full board meeting. This has the advantage of avoiding potentially awkward situations. First, imagine a scenario where a board member has nominated a \u201cclose friend\u201d to serve on the board, but who may not be a good choice for the board. Having such a frank discussion is easier \u201cin committee\u201d than in the presence of the board member. Similarly, when reviewing the renewal of existing board members, its usually easier to have a more open and honest assessment, including key staff input, without having the entire board present. Like all committee work, its also a more efficient use of the board\u2019s time to have committees make recommendations and reports rather than bog down the entire board with every decision. Lastly, a separate nominating committee can potentially prevent a small board from evolving into a dictatorship where only a few members dominate everything.<\/p>\n By-laws, like strategic plans and business plans, are not commandments fixed in stone, but, rather, should be approached as living, breathing, and malleable tools that provide structure as well as flexibility. When thinking of by-laws, you not only need to think of current operations, but creating mechanisms for growth. Even though your board may now be small, you want think big. Similarly, even though your board may currently be one big happy family, you want to think of the future when, like all families, everyone inevitably starts to get one everyone else\u2019s nerves.<\/p>\n _________________________________________________________________<\/p>\n For additional information and resources on this and other ![\"\"](\"http:\/\/www.musicalamerica.com\/mablogs\/wp-content\/uploads\/2012\/07\/GG-logo_for-twitter.jpg\"){kind=logo}
<\/a>legal and business issues for the performing arts, visit ggartslaw.com<\/a><\/p>\n