"Best before ..." How long should a Board Member stay?

One of the commonest questions people discuss with me is the length of a board member's shelf-life. As a general guide, there's a good rule for management and boards that it's better to leave a year too early than stay a year too long (I suppose a recent Australian Prime Minister might be pondering the same ...).

However, I think there's a fundamental difference between how long a Chief Executive is likely to be in the role and how long a non-executive board member (who doesn't work there in a 'day job') should serve. When a CEO arrives in a new job, he or she will then eat, live and breathe it every day of the week, while a board member probably has contact with the business only a few times a month.

I may be a slow learner, but I find it usually takes a couple of years at least as a new board member to feel that I really understand the business and its issues, its strengths and its risks. It seems to me that so many organisations with term-limits of 2-4 years (whether formal or just habitual) are wasting enormous potential value: just as the board member is really starting to contribute, we get rid of them. I worked recently with one organisation that has a limit of two 1-year terms for their board members ... and they wonder why their board doesn't provide any real leadership!

The other consequence of these short-term appointments, if your board members never get the chance to become fully effective, is that the organisation will almost inevitably be dominated by the CEO, with few checks or restraints. Either that, or the CEO will get frustrated that the board members never really understand what's going on and therefore won't make decisions. I've seen both and they're both likely to end in tears, and at least one departure.

In New Zealand, we see this in companies owned by the Government, SOEs, Crown Research Institutes, etc - some of them very large and complex: the convention is that you serve up to two 3-year terms, so, just as you get up to speed, they blow the whistle and call 'full-time'. We are finally seeing a bit of flexibility around third terms, but I shudder at the number of good directors who've been lost to their companies just as they were starting to make a real contribution to the strategy, and to provide some real support (and challenge) for the CEO.

If a board member is really performing and adding value around the board table, then why wouldn't you want to keep them for 8, 10 or even 12 years? Ask any CEO who their most valuable board member is and they'll almost always name one of the longest-serving.

On the other hand, long service isn't a right. A board member has a responsibility to keep up to date with the issues of the organisation and the industry: today's challenges are very different from those of 2003, and I'm sure they'll be different again in 2013!

My biggest challenge a few years ago as chair of a non-profit organisation was to help a couple of very long-serving board members - passionate volunteers, who'd put their hearts into the place over nearly twenty years - to realise that they were operating mentally in the 1980s, and that we really needed some fresh skills for a new environment. Even in a non-profit (sometimes, especially in a non-profit), enthusiasm on its own isn't enough: you need to make sure you've got the skills, experience and networks that are relevant today, and will be tomorrow.

And let's not even talk about the worst case I saw - a board member, totally unsuited to the role, who fell asleep (at my count) in 18 of his 22 board meetings, before, thankfully, his appointment was not renewed.