Staggered board.
In plain English
A staggered board, also called a classified board, divides directors into classes whose terms expire in different years. Typically about a third of the seats come up annually, so gaining board control takes at least two consecutive annual meetings. Companies argue the structure preserves continuity and long-term thinking. Investors often argue it insulates directors from accountability, and many large companies have moved to annual election of every director under shareholder pressure.
01Why it matters
If you want to hold directors accountable through your vote, a staggered structure means you can only reach a fraction of them in any given year.
02The math, step by step
A 9 seat board split into three classes puts 3 seats up each year. Winning every contested seat in one meeting still leaves 6 incumbents in place until the following year.
Illustrative example. The amounts here are hypothetical, chosen to show how the math works, not real quoted rates or figures.
03What this is NOT
Committee membership rotating among directors is internal scheduling. A staggered board changes the election itself, limiting how many seats shareholders can vote on at one time. One is housekeeping, the other is a structural defense.
04Receipts
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Plain-English answers from our glossary. Receipts included. Never advice.
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