Quarterly Compliance Article – Pros and Cons of Term Limits for Board Members

As health centers strive for optimal governance structures and move towards a generative functioning model, a common question is whether term limits for board members are required by HRSA. Upon reviewing Chapter 19 (Board Authority) and Chapter 20 (Board Composition), it is clear that term limits are not a program requirement. However, they can be considered an industry best practice. The discussion around implementing term limits continues to be a significant topic for health centers.

Determining whether board members should have term limits is a governance decision, and the following pros and cons can help the board of directors.

Pros of Having Term Limits

  1. Fresh perspectives and innovation: Having terms helps to ensure a regular influx of new board members, which can bring in fresh ideas and perspectives. Creating and maintaining a board matrix can help with determining the skill-set and expertise needed to recruit. Fresh ideas can help keep the health center dynamic, and avoid founder’s syndrome which can be caused by long-term members. 
  2. Increased Accountability: Implementing term limits can enhance commitment to performance and accountability among health center board members. Knowing their tenure is limited, board members may work more diligently to make impactful contributions. Additionally, long-term board members often have other commitments or responsibilities they wish to pursue. Stepping down from the board for a period can allow them to attend to these other obligations.
  3. Improved Diversity: Implementing term limits can enhance diversity in terms of skills, experience, and demographics. HRSA requires that 51% of the board must be patients of the health center and represent the patient demographics based on race, ethnicity, and gender. By enforcing term limits, the board can ensure a broader representation, leading to more robust discussions, improved decision-making, and better alignment with the demographics served by the health center.\

Cons of Implementing Term Limits

  1. Loss of expertise: One of the greatest challenges is recruitment and retention of board members. When an engaged board member is discovered, it is difficult to let them go; especially if they participate in committees, attend health center events and contribute to meaningful discussion. Imposing term limits may result in the loss of this valuable experience and expertise that long serving members bring. It’s especially important to maintain consistency if the health center has gone through challenging times, and consistent board membership helps with the historical knowledge of crucial events.
  2. Focusing on short-term goals only: Board members with limited terms may be challenged in thinking of the big picture, especially if planning for an expansion of sites or services. Board members may prioritize short term goals over long term goals. 
  3. Length of time spent recruiting new board members: It takes a significant amount of time and additional resources to recruit new board members while ensuring compliance with the board composition requirements. If a health center has a committee devoted to recruiting and mentoring new board members, this may burden board members to dedicate additional time to identify, recruit and orient new board members. Finally, it’s important that new board members feel welcomed and ensure that they receive appropriate board orientation. A board that invests in recruitment and retention of its members is more cohesive. 

Regardless of whether a health center board decides to implement term limits, the board should ensure that the governance requirements are always met, and not just during a site visit. Being proactive and continuously recruiting will assist health centers in practicing operational excellence.  

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