By any measure, corporate governance is having a moment. From banking failures to shareholder activism, the question of how boards are structured—and how they function—has rarely been more pressing. Yet amid the calls for reform, one idea stands out for its clarity and practicality: the case for retaining long-tenured directors.
Recent research co-authored by Mascia Ferrari offers a timely intervention in this debate. Drawing on extensive data from US listed companies, Ferrari and her colleagues challenge the prevailing orthodoxy that long service on a board necessarily undermines independence. Instead, they argue that, when used judiciously, tenure can be a source of strength rather than weakness.
The dominant governance narrative of the past decade has favoured renewal. Institutional investors and proxy advisers have pushed for limits on director tenure, warning that extended service risks fostering complacency or excessive alignment with management. In some jurisdictions, these concerns have translated into formal or informal caps, often around the 10–12 year mark.
Ferrari’s work complicates this picture. The research suggests that companies with at least one long-serving independent director—typically defined as 15 years or more—tend to outperform those without. The effect is not marginal. Firms with such a presence show measurably stronger performance and appear less prone to governance failures, including shareholder litigation and activist interventions.
The explanation lies in what might be termed “institutional memory”. Long-tenured directors accumulate deep knowledge of a company’s operations, strategy and risk profile over time. This familiarity allows them to spot inconsistencies, challenge overly optimistic assumptions and provide continuity during periods of upheaval. In complex or highly regulated industries, where firm-specific knowledge is difficult to acquire quickly, this role becomes particularly valuable.
Importantly, the benefits identified by Ferrari do not extend to boards dominated by long-serving members. On the contrary, excessive tenure across the board can dilute independence and reduce the inflow of new ideas. The research points instead to a more balanced model: one or two experienced directors embedded within an otherwise refreshed and diverse board.
This distinction is critical. It shifts the debate away from blunt instruments such as tenure caps and towards a more calibrated approach to board composition. Rather than asking how long is too long, companies might better ask what mix of experience and renewal best serves their strategic needs.
The implications for policymakers and investors are equally significant. Efforts to impose strict tenure limits risk removing precisely those individuals who contribute most to stability and oversight. As Ferrari’s research indicates, the presence of a single seasoned director can enhance governance without compromising independence.
Boards must remain vigilant against entrenchment and ensure that long-serving directors continue to add value. Regular evaluations, clear accountability and a culture of open challenge remain essential.
But the broader lesson is clear. In the search for better governance, experience should not be treated as a liability to be managed away. Properly integrated, it is an asset—one that can strengthen oversight, improve decision-making and, ultimately, support long-term performance.
At a time when corporate boards are expected to navigate increasing complexity and uncertainty, that is a message worth heeding.
