Staggered elections
In staggered elections, not all places in an elected body are up for election at the same time. For example, United States Senators have a six-year term, but they are not all elected at the same time. Rather, elections are held every two years for one-third of Senate seats.
Staggered elections have the effect of limiting control of a representative body by the body being represented, but can also minimize the impact of cumulative voting.[1]
Many companies use staggered elections as a tool to prevent takeover attempts. Some legislative bodies (most commonly upper houses) use staggered elections, as do some public bodies, such as the Securities and Exchange Commission.
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Application in business[edit]
A staggered board of directors or classified board is a prominent practice in US corporate law governing the board of directors of a company, corporation, or other organization, in which only a fraction (often one third) of the members of the board of directors is elected each time instead of en masse (where all directors have one-year terms). Each group of directors falls within a specified "class"—e.g., Class I, Class II, etc.—hence the use of the term "classified" board.[2]
In publicly held companies, staggered boards have the effect of making hostile takeover attempts more difficult. When a board is staggered, hostile bidders must win more than one proxy fight at successive shareholder meetings in order to exercise control of the target firm. Particularly in combination with a poison pill, a staggered board that cannot be dismantled or evaded is one of the most potent takeover defenses available to U.S. companies.[3]
Institutional shareholders are increasingly calling for an end to staggered boards of directors—also called "declassifying" the boards. The Wall Street Journal reported in January 2007 that 2006 marked a key switch in the trend toward declassification or annual votes on all directors: more than half (55%) of the S&P 500 companies have declassified boards, compared with 47% in 2005.[4]
Legislative bodies which use staggered elections[edit]
National[edit]
- Chamber of Deputies of Argentina
- Senate of Argentina
- Senate of Australia
- Senate of Brazil
- Senate of the Czech Republic
- Senate of France
- House of Councillors of Japan
- Senate of Pakistan
- Senate of the Philippines
- United States Senate
State[edit]
Australia[edit]
Three of Australia's five State Legislative Councils use staggered elections:
- New South Wales Legislative Council
- South Australian Legislative Council
- Tasmanian Legislative Council
Local councils in Western Australia also have staggered elections.[5]
United States[edit]
29 of the State Senates in the United States have staggered elections:[6]
- Alaska State Senate
- Arkansas State Senate
- California State Senate
- Colorado State Senate
- Delaware State Senate
- Florida State Senate
- Hawaii State Senate
- Illinois State Senate
- Indiana State Senate
- Iowa Senate
- Kentucky State Senate
- Missouri State Senate
- Montana State Senate
- Nebraska State Senate
- Nevada State Senate
- North Dakota State Senate
- Ohio State Senate
- Oklahoma State Senate
- Oregon State Senate
- Pennsylvania State Senate
- Tennessee State Senate
- Texas State Senate
- Utah State Senate
- Washington State Senate
- West Virginia State Senate
- Wisconsin State Senate
- Wyoming State Senate
Local[edit]
- Some local councils in the United Kingdom
See also[edit]
Notes[edit]
- ^ http://www.stroock.com/SiteFiles/Pub341.pdf
- ^ See Faleye,O., 2007, Classified Boards, Firm value, and Managerial Entrenchment, Journal of Financial Economics83, 501-529.
- ^ See Lucian Bebchuk, John C. Coates IV, and Guhan Subramanian, The Powerful Antitakeover Force of Staggered Boards: Theory, Evidence, and Policy, 54 Stan. L. Rev. 887 (2002).
- ^ Jared A. Favole, "Big Firms Increasingly Declassify Boards", The Wall Street Journal, Jan. 10, 2007.
- ^ "Local Government Elections", Western Australian Electoral Commission.
- ^ "Length of terms of state senators", Ballotpedia, Accessed 24 August 2016.
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