In a volatile business landscape, dynamic board governance is key to overseeing risks and corporate strategies amid uncertainty. The board must have the capabilities, expertise and perspectives to provide oversight, support the CEO and leadership team as well as review strategies and opportunities amid a rapidly changing environment.
Board chairs, nominations and governance committees, CEOs, executive teams, investors and proxy advisors all emphasize the critical importance of board composition for ensuring governance aligns with the business environment and strategy, effectively supporting the leadership team and organization. And yet, director turnover remains consistently low for U.S. companies. In 2024, according to Spencer Stuart research, only 58% of S&P 500 boards added a new director, translating to an average of less than one new director (0.83) per board.
The right amount of board turnover differs by board, depending on many factors. Keeping this in mind, CEOs are concerned their boards don't have the skills they need to support their business. Our Measure of Leadership survey revealed more than three-quarters of CEOs and directors feel high levels of business uncertainty, yet less than one-third of CEOs believe their board is equipped to address organizational challenges.
Considering this environment, it's important for boards to look at their succession strategies, specifically what they can do to refresh their composition. From more formal policies like tenure limits and mandatory retirement ages, to board and director assessments and skills matrices, to fostering a board culture where every director — new or tenured — understands board service is dependent on boardroom needs, boards have many possible paths to ensuring they have the right directors on the board to meet the current moment.
The best board succession strategies incorporate several techniques, avoiding sole reliance on a single tool, such as mandatory retirement ages or tenure limits.
Assessments and skills matrices. Almost all S&P 500 companies conduct some sort of performance evaluation for their boards. And in 2024, 73% included a director skills matrix in their proxies, nearly double the percentage from just four years prior.
The most successful board, committee and director evaluations are more than “check-the-box” compliance exercises, but rather pathways for engaging in a deep, insightful assessment of board performance, all within the context of the company itself. What are the strengths and weaknesses of the board's leadership? How well does the board collaborate with the CEO? What skills and perspectives do each director bring to the table?
A skills matrix is invaluable for constructing a strong board with a diverse mix of perspectives and experiences. The best matrices are tailored to each company's business and strategy and are reviewed annually to ensure each square identifies needed skills or experiences. They inform ongoing recruitment and retention strategies to keep the board dynamic and effective.
It’s worth noting why assessments and skills matrices can fall short:
- Overconfident boards may grade themselves too highly.
- Resistant boards and directors may dismiss their value.
- Directors who are reluctant to impartially evaluate how well their own expertise fits within the board's needs.
Strong boards, on the other hand, seek out blind spots to prioritize improvements. In our experience, more effective processes include peer evaluations, regularly updated skills matrices and the periodic use of third parties.
Tenure limits and retirement ages. Tenure limits and mandatory retirement ages can offer clear boundaries regarding how long directors serve on boards, providing a mechanism for regular refreshment while also enabling the board to be more proactive about succession planning. However, while they can help achieve board turnover, they should not be the sole mechanism for renewal. Rather, they should serve as part of a comprehensive approach to refreshment that includes robust director evaluations, peer feedback, skills matrices and ongoing discussions in the boardroom and with the executive team.
Many countries have regulations limiting director tenures, but there are no such regulations in the United States and self-imposed limitations on director terms remain quite rare: Only 9% of S&P 500 boards reported a tenure limit in 2024. Furthermore, the U.S. boards that do have limits tend to set relatively lengthy maximum tenures, with almost three-quarters setting limits of 15 years or more.
Mandatory retirement ages are more common, although the number of S&P 500 boards reporting a mandatory retirement age for directors has dropped from 73% in 2014 to 67% in 2024. Among boards with age limits, 60% set the retirement age at 75 or older.
While tenure limits and mandatory retirement provide an objective pathway to board refreshment, they have some vocal objectors. In a 2025 Spencer Stuart survey, for example, a few respondents called them “cop-outs” for boards unwilling to have tough conversations with underperforming directors. Others note that, considering how long it can take for a new director to feel “at home” on a board, placing restrictions on their tenures may lead to the removal of effective directors who are otherwise valuable contributors to the board.
There are a few keys to successfully using age and tenure limits. One is in the implementation — namely, setting benchmarks that are right for the organization's unique situation and ensuring there are no exceptions. Granting waivers can create the impression that the policy will be waived for all directors, making it difficult to refresh the board. Additionally, succession planning should start early, planning accordingly for succession over a longer period of time.
Setting tenure limits and retirement ages does not mean a board's work is done; turnover policies should be a part of a broader strategy for refreshment. As we'll explore, boards must create and maintain a culture and mindset of continuous improvement and refreshment, one that identifies and addresses skills gaps, conducts objective evaluations and is willing to make difficult decisions, such as asking underperforming directors to step down, if necessary.
A board culture of accountability. Our recent survey of directors on board refreshment highlighted how a cultural resistance to change on the board is a key factor in boardroom evolution. The top barriers to boardroom change cited by respondents can be linked almost directly to the board's culture:
- 35% cited reluctance to remove directors whose skills are no longer relevant
- 32% said their boards are hesitant to remove underperforming directors
- 26% cited personal relationships among board members
- 22% pointed to lack of urgency
Boards understandably want collegiality; after all, that's critical to ensuring directors feel comfortable sharing their perspectives and experiences, asking questions and performing their oversight duties. But this collegiality can also make boards hesitant to make tough decisions about their composition.
A more proactive approach can ensure the right talent mix. This means identifying knowledge gaps, conducting honest evaluations and occasionally making tough calls, like seeking the resignation of underperforming directors or those whose skills are no longer boardroom priorities. Directors must have the self-awareness to recognize when it's time for them to leave the board.
Board leaders are important for laying the groundwork for an open, courageous approach to refreshment. The goal is to create a culture where a directorship is not seen as a lifetime appointment, but rather about being part of a dynamic group committed first and foremost to the best interests of the shareholders and the company.
Four Questions to Guide Your Board Refreshment Strategy
We suggest asking these questions, which help identify where a board refreshment would be beneficial.
- Do we have a clear process for assessing our capabilities and identifying gaps? Skills matrices, individual director assessments and one-to-one feedback can help dig into a board's strengths and weaknesses.
- Do we have a clear view of the skills, capabilities and backgrounds we are likely to need over the next few years? The board should check in regularly to discuss whether it has the right expertise to oversee the complex issues facing their company in the future.
- Do we welcome a variety of perspectives? Different perspectives lead to higher-quality decisions. This is more than merely recruiting directors with a variety of backgrounds and capabilities — it's about fostering a culture where a range of viewpoints are encouraged, heard and discussed.
- Do we have a board culture that embraces change? If a director is underperforming or lacks recency of experience or prioritized capabilities, a strong culture will ensure the issue is addressed in a professional, timely way. The best boards are objective in assessing their performance and capabilities, seeking a third-party perspective where useful and relevant and — crucially — taking actions to continuously improve the board's effectiveness.
Refreshment is part of the ethos of a thriving board. Every director is engaged and focused on the best interests of the company and its stakeholders. Boards have a range of tools at their disposal — from tenure and age limits and skills matrices to broader efforts to align the corporate culture — that ensure the board has the right makeup and perspectives to support the CEO and leadership team effectively. Ultimately, to best help a company succeed, its board must have the courage to make refreshment decisions that align with the evolving needs of the company rather than relying solely on rules of tenure or age.