Thompson (54) has resigned from both the ORFU board and the Highlanders board, saying his business commitments meant he was unable to fully dedicate himself to the position.
Thompson had been on both boards for 12 years but his job as a chartered accountant, specialising in tax, was making him too busy to handle the dual rugby commitments.
Both the union and the franchise will seek a replacement.
Thompson said he was the sort of person who had to commit 100% to the job or he was not prepared to do it.
Resigning was a tough decision to make but he felt it was the only option.
He denied any suggestion he had resigned because he was unhappy with decisions made by either board.
He had been an independent board member, though he had connections with the Zingari-Richmond club.
He was one of two Otago union representatives - Adrian Read was the other - on the Highlanders board.
During his 12 years, Thompson had seen the highs and lows of rugby in Otago and the Highlanders.
He accepted rugby was a public game and everyone had an opinion on it, but felt much of the criticism of the board and the union was ill-informed.
"A lot of answers or solutions that get suggested to us are one-dimensional. I can't think of one thing that was addressed to us that we hadn't already talked about," he said.
"The answer to a lot of the problems facing the game is complex. It is a very complex business with extremely complex issues. All you want to do is get in there, present your view and do the best that you can."
The boards have come under criticism for failing to produce a competitive team on the paddock as the gates have dwindled at both the Highlanders and Otago level.
Thompson said the criticism showed people were still interested in the game and were still passionate about it.
He said the biggest issue facing the game in the south was professionalism, and that was not working in favour of the Highlanders.
Long gone were the days when the Otago side would be loaded with imported talent via the University of Otago.
Players from outside the area tend to stay home, signed up by their own unions.
"The dollar counts more and more and with our small population base down here, we are going to struggle."
Thompson said there was no obvious answer, "so you just try and do the best you can".
Thompson will be the second Highlanders board member to resign in the past couple of months, after Malcolm Farry stepped down in April.
A replacement for Farry is yet to be announced by the New Zealand Rugby Union. Applications for Farry's position closed at the end of last month.
ORFU chairman Ron Palenski said Thompson's experience and business expertise would be greatly missed and he had given great service.
He hoped to name a replacement board member, and also the Otago union representative on the Highlanders board, next month.
