classified board

Classified Board

An elected board of directors. The members serve longer terms, and elections are staggered in hopes of creating a level of continuity.

Notes:

Also known as a staggered board, this method of election has the advantage of continuity and preservation of skill however, it also creates difficulties for shareholders trying to ratify a complacent board member.

See also: Board of Directors, Corporate Governance, Inside Director, Outside Director

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Classified Board

Also known as Staggered Board: is one in which the directors are placed into different classes and serve overlapping terms. Since only part of the board can be replaced each year, an outsider who gains control of a corporation may have to wait a few years before being able to gain control of the board. This slow replacement makes a classified board an effective delays of takeovers. Sometimes known as a delay provision.

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classified board

A corporate board of directors whose members are elected to terms that expire in different years. A classified board makes it more difficult for a new owner to assume control in a takeover. See also staggered terms.