Classified Board

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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.

Classified Board

A board of directors where members start their terms at different times and only a certain number are elected in a given year. For example, a board of directors may have 10 members serving five-year, staggered terms where two new members are elected each year. In addition to giving the board consistency in its membership, a classified board makes hostile takeovers more difficult because the potential acquirer can replace only so many directors at a time.

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.
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Thus, we incorporate indicator variables to capture CEO duality and the presence of classified boards.
Adding to the spate of high-profile issues in recent years--such as classified boards, criteria for executive compensation, consideration of non-executive chairman or lead independent director roles, director conflicts of interest or related party transactions--are issues of more recent vintage such as fee-limiting bylaws, proxy access and special committees for technology or cybersecurity issues.
This set includes classified boards, golden parachutes, limitations on bylaw and charter amendments, supermajority voting, and poison pills.
She is conducting a rearguard action to revive management-centric governance, discourage scrutiny of boardroom decisions, discredit shareholder activism, and resurrect traditional corporate defenses such as classified boards and dual-class common stock.
The fund has identified several corporate-governance failures, such as ignoring majority-approved shareholder proposals, and having a non-independent chairman or classified boards and a poison-pill mechanism.
First, several recent studies investigating the impact of classified boards report that classified boards promote managerial entrenchment, exacerbate agency conflicts, and diminish firm value (Bebchuck and Cohen, 2005; Faleye, 2007).
provider of e-commerce transaction software and services for advertisers and publishers, announced that edgeio will use AdStar technology to power print and online ad transaction services for newspapers on edgeio's Classified Boards, launched this week.
A firm can adopt shareholder choice by giving shareholders the right to remove at will a board that fails to heed shareholder wishes; it can adopt a pure board veto paradigm by means of dual class stock or a deadhand poison pill placed into the charter; or it can adopt any number of intermediate structures, including annually elected (but nonremovable) boards and classified boards.
C, a leading source for investors and corporations of impartial information on corporate governance and social responsibility issues, has announced that it will provide a Web-based "Scorecard" on three key proxy issues this season: global warming, CEO compensation ("golden parachutes") and classified boards.
6) Unlike studies concerning shareholder-rights plans, (7) there is no empirical evidence that classified boards provide tangible economic benefit to shareholders.
We have no poison pills, no shareholder rites, no classified boards, nothing like that.
More specifically, it examines the impact of the percentage of stock owned by managers, employees, and institutional investors on the level of support for three popular shareholder proposals: to repeal classified boards, to redeem or require a shareholder vote on "poison pills," and to adopt cumulative voting (See Table 1 for description of proposals).

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