How to Proactively Approach Board Refreshment

To remain effective, boards should look beyond their current composition and think ahead about how they will align with future strategy and challenges.

The role of the board has never been more critical or dynamic. Given the complex geopolitical and corporate landscape, boards should function as living, breathing organisms that evolve alongside the companies they oversee. 

Proactive Board Refreshment

Regular board refreshment is no longer just a matter of good governance hygiene; it is a strategic imperative. A proactive approach enables boards to continually assess what skills are needed in the boardroom and rigorously evaluate themselves against those needs. It also supports long-term succession planning by allowing time for orderly transitions and broadening the pool of director candidates well in advance of a departure.

Institutional investor expectations about board composition have also tightened. BlackRock, Vanguard Group, and State Street Corp., for example, advise companies to demonstrate a formal process for proactive board refreshment to ensure the board maintains an appropriate mix of skills and diverse perspectives. 

Vanguard specifically looks for disclosures on the board's evaluation process, including the identification of skill gaps and opportunities for evolution, to ensure it remains "fit for purpose." State Street’s primary focus is to ensure average board tenure aligns with the industry's business cycle, and State Street explicitly considers a board's refreshment practices when assessing long-tenured directors. BlackRock also considers tenure and “may oppose the election of certain directors who serve on boards that appear to have an insufficient mix of short-, medium-, and long-tenured directors.”

The introduction of the universal proxy card and the rise of shareholder activism have heightened the importance of deliberate board refreshment. Activists increasingly target board seats when they see skill, experience, or independence gaps. With the universal proxy card, shareholders can more easily vote for a mix of company and dissident nominees, making it simpler for both sides to negotiate board representation, instead of resorting to full proxy battles. Boards that fail to refresh themselves risk ceding control over their futures.

How to Approach Board Refreshment

To think proactively about board succession, boards should undergo regular composition reviews, ideally on an annual basis. These exercises can range in complexity and incorporate reviews of board skills matrices and benchmarking against peers or investor expectations.

Reviews may be conducted internally by the nominating and governance committee, but engaging a third-party facilitator is recommended to ensure objectivity. Based on the results of these reviews, the nominating and governance committee can assess the strengths and gaps of the board, enabling committee members to identify potential role updates and director candidates ahead of upcoming retirements and transitions.

Some boards will enact formal mechanisms to ensure refreshment. Age-based retirement limits are the most common: 62 percent of S&P 500 companies used age limits in 2025, with 75 as the most prevalent age for this limit. Term or tenure limits are also slowly rising in popularity, with 10 percent of S&P 500 companies using term limits in 2025, up from 5 percent in 2018. The most common term or tenure limit is 15 years, according to the study.

Key Composition Considerations

Best-in-class boards understand that getting composition right is both an art and a science. Public company boards must comply with regulatory requirements, such as maintaining majority independence and ensuring that they have qualified, compliant board and committee leaders, as well as financial experts. Optionality is key for board leadership succession: Boards should strive to have multiple candidates on the board who could fill leadership roles when necessary.

Boards also should consider the relevant mix of skills and experience needed to match the circumstances of the company and its strategy. Public company CEO, chief financial officer, profit and loss, and other relevant industry experience are typically preferred for service on any company’s board 

As boards face tremendous pressure, different areas of functional and experiential expertise are increasingly important. The top three operational risk concerns for boards right now are cybersecurity and data security risk, political and regulatory risk, and organizational change. Consequently, there is growing demand for directors with cybersecurity, artificial intelligence, and business transformation expertise. Despite shifting regulatory and investor expectations, language, and disclosure requirements on board diversity, boards should remain vigilant regarding potential governance vulnerabilities and continue to consider director diversity in all its forms.

Having a well-balanced board is about more than just experience; boards should have the right mix of soft skills and best practice behaviors. No one director will exhibit all the characteristics needed for a high-performing board, so it is crucial to assess current directors and potential candidates based on where they fit in the overall picture.

Going Forward

While proactive board succession planning requires significant effort and investment up front, the payoff is a board that is resilient, future-ready, and better equipped to support company strategy and oversee value creation. Boards that wait until transitions arise risk diminished performance and increased exposure to investor and activist scrutiny. By making board refreshment a standing agenda item and investing in forward-looking succession planning, boards can confidently navigate complexity, anticipate emerging needs, and secure the leadership required for tomorrow’s challenges.

The views expressed in this article are the authors’ own and do not represent the perspective of NACD.

Russell Reynolds Associates is a NACD strategic content partner, providing directors with critical and timely information, and perspectives. Russell Reynolds Associates is a financial supporter of the NACD.