Board Diversity by Term Limits?

50 Pages Posted: 18 Mar 2019 Last revised: 17 Dec 2019

See all articles by Yaron Nili

Yaron Nili

University of Wisconsin Law School; European Corporate Governance Institute (ECGI)

Darren Rosenblum

McGill University - Faculty of Law; Pace Law School; University of California, Berkeley - Berkeley Center on Comparative Equality & Anti-Discrimination Law

Date Written: March 15, 2019


Four-fifths of the corporate board seats in the United States are held by men and a shocking number of companies lack any female representation on their boards. While institutional investors have pushed these companies for change, California took a more aggressive step and followed several European countries by mandating a quota for board representation. Heated argument has ensued over what diversity we should prioritize and what mechanisms should be used to promote diversity. Yet, could these challenges be avoided altogether, through the use of term limits? This Article is the first academic inquiry exploring the connection between term limits and the sex diversification of the corporate board. Drawing upon quantitative data on director turnover in the S&P 1500 and qualitative data on S&P 500 firms with term limits, our research shows that firms experiencing higher board turnover have more sex diversity. We argue then that term limits, a mechanism that increases turnover, may correlate with improved sex diversity on boards. Our findings suggest that promoting term limits in the U.S. offers a market-based mechanism that could avert these polarized diversity debates.

Keywords: Diversity, Corporate Governance, Directors, Gender Diversity, Term Limits, Corporate Law

Suggested Citation

Nili, Yaron and Rosenblum, Darren, Board Diversity by Term Limits? (March 15, 2019). 71 Alabama Law Review 211 (2019), Univ. of Wisconsin Legal Studies Research Paper No. 1467, Available at SSRN:

Yaron Nili (Contact Author)

University of Wisconsin Law School ( email )

975 Bascom Mall
Madison, WI 53706
United States

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels

Darren Rosenblum

McGill University - Faculty of Law ( email )

3644 Peel Street
Montreal, Quebec H3A 1W9

Pace Law School ( email )

78 North Broadway
White Plains, NY 10603
United States
914 422 4663 (Phone)

University of California, Berkeley - Berkeley Center on Comparative Equality & Anti-Discrimination Law

Boalt Hall
Berkeley, CA 94720-7200
United States

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