Staggered Board of Directors

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Description of Staggered Board of Directors. Explanation.


Definition Staggered Board of Directors. Description.

The members of a Staggered Board of Directors have terms that expire at different times. This way of replacing boards is a tactic used to prevent hostile takeovers, because a potential acquirer has to wait longer to take control of the board.

Originally, all directors were elected simultaneously at the annual shareholders meeting.

A disadvantage of this method is that it limits the shareholder control of accountability in its directors through annual elections.

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Compare with: Anti Hostile Takeover Mechanisms  |  Corporate Governance  |  Lobster Trap  |  Directors and Officers Liability Insurance  |  Voting Rights Plan

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