Definition of Staggered board:
Structure of board of directors in which every year a fraction of the directors are elected, each for multiyear term. Also called classified board.
A staggered board is a board that consists of directors grouped into classes who serve terms of different lengths. A staggered board is typically established to dissuade a potential hostile takeover bid. A typical staggered board has three to five classes of positions on the board, each carrying terms of service that vary in length, allowing for a staggering of elections. .
A staggered board is also known as a classified board because of the different classes involved. During each election term, only one class of positions are open to new members, thereby staggering the number of openings available within the board directorship at any one time. For example, a company with nine board members divided into three classes—Class 1, Class 2 and Class 3—will assign three members per class. Class 1 members serve a one-year term on the board, Class 2 members serve two years, and Class 3 members hold their seats for three years. .
How to use Staggered board in a sentence?
- A staggered board of directors is a system that typically aims to prevent hostile takeovers.
- Staggered boards typically consist of “classes” of positions, each holding elections in different years. .
- Although staggered boards are useful in preventing hostile takeovers, they are also considered to be disadvantageous to shareholders. .
- In a staggered board approach, a company only opens up a portion of their director positions to election at any one time.
- Due to their negative impact on shareholders, staggered boards have recently been on the decline. .
Meaning of Staggered board & Staggered board Definition