Why Boards of Directors Need Term Limits

Boards are reluctant to go outside their circle of friends, associates and acquaintances when they are recruiting board replacements. That’s one problem. The other is there is not enough turnover on boards to free up positions for newcomers. He told me in Asian countries it is common to see a limit of 10 years before directors are required to leave a board; in North America you can find examples of board members who have been around as long as 50. The reality is, it’s a closed club.

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