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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Simone Sepe over classified boards. The weapons were statistics (and
Thus, we incorporate indicator variables to capture CEO duality and the presence of classified boards. (14) Our prior is that if these factors are important in adding to, or attenuating, agency conflicts then they will affect the likelihood that a firm purchases D&O insurance.
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.
These trends are illustrated in Figure 3 where the proportion of red classified boards increases as the tree diameter increases.
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).
Marina del Rey, Calif.-based AdStar Inc., 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.
Classified boards are those in which members have staggered terms.
Another topic expected to draw attention concerns classified boards, which many investors believe reduce directors' accountability to shareholders.

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