Issues regarding director tenure continue to be a board challenge. A recent The Wall Street Journal article speaks to concerns of institutional investors with the "long stay director"; i.e., a director who has been on the board for more than 12 years.
The article cites data suggesting that only a small percentage of S&P companies have term limits and that independent directors at more than 100 such companies have served for 25 years or more. Thus, an increasing number of investor groups are either (a) opposing the re-election of long stay directors; or (b) requesting that the performance of such directors be vigorously reviewed and/or they be classified as non-independent.
These questions of tenure and compromised independence are absolutely relevant to nonprofit health system boards, many of which greatly value the unique experience of long stay directors. In the absence of best practices, governance committees should remain engaged on this issue.