Staggered Board

A board structure in which directors are divided into multiple classes (typically three) with overlapping terms, so that only a fraction of the board is up for election in any given year. Staggered boards (also called classified boards) provide continuity of governance and serve as a defense against hostile takeovers, since an acquirer cannot replace the entire board in a single election. However, critics argue that staggered boards reduce board accountability to shareholders by making it harder to replace underperforming directors.