Staggered elections are elections where only some of the 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.
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] The work of the Shareholder Rights Project has had a significant effect on the number of classified boards on the S&P 500.[3]:159
In publicly held companies, staggered boards have the effect of making hostile takeover attempts more difficult; however, they are also associated with lower firm value.[4]:10 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.[5]
In corporate cumulative voting systems, staggering has two basic effects: it makes it more difficult for a minority group to get directors elected, as the fewer directorships up for election requires a larger percent of the equity to win; and it makes takeover attempts less likely to succeed as it is harder to vote in a majority of new directors.[6] Staggering may also however serve a more beneficial purpose, that is provide "institutional memory" — continuity in the board of directors — which may be significant for corporations with long-range projects and plans.[6]
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.[7]
Chamber | Type | Classes | % of seats up per election | Method of Staggering | ||
---|---|---|---|---|---|---|
Total | 1 | 2 | 3 | |||
Argentine Chamber of Deputies | Lower house | 2 | 130 / 257
|
127 / 257
|
Every constituency has seats in both classes, with roughly half of the seats contested in each class individually | |
Argentine Senate | Upper house | 3 | 24 / 72
|
24 / 72
|
24 / 72
|
Each constituency has all its seats in one class only |
Australian Senate | Upper house | 2 | 40 / 76
|
40 / 76
|
Most constituencies have seats in both classes, with half of the seats contested in each class individually Some constituencies have all of their seats contested in each and every class | |
Brazilian Senate | Upper house | 2 | 54 / 81
|
27 / 81
|
Every constituency has seats in both classes, with two-thirds of the seats contested in class 1 and the remaining one-third in class 2 | |
Senate of Chile | Upper house | 2 | 23 / 43
|
20 / 43
|
Each constituency has all its seats in one class only | |
Senate of the Czech Republic | Upper house | 3 | 27 / 81
|
27 / 81
|
27 / 81
|
Each constituency has all its seats in one class only |
Senate (France) | Upper house | 2 | 174 / 348
|
174 / 348
|
Each constituency has all its seats in one class only | |
Rajya Sabha (India) | Upper house | 3 | 77 / 245
|
78 / 245
|
78 / 245
|
|
House of Councillors (Japan) | Upper house | 2 | 124 / 248
|
124 / 248
|
Every constituency has seats in both classes, with half of the seats contested in each class individually | |
Senate of Liberia | Upper house | 2 | 15 / 30
|
15 / 30
|
Every constituency has seats in both classes, with half of the seats contested in each class individually | |
National Assembly (Nepal) | Upper house | 3 | 19 / 59
|
20 / 59
|
20 / 59
|
Every constituency has seats in all three classes, with roughly a third of the seats contested in each class individually |
Senate of Pakistan | Upper house | 2 | 52 / 104
|
52 / 104
|
Every constituency has seats in both classes, with half of the seats contested in each class individually | |
Senate of the Philippines | Upper house | 2 | 12 / 24
|
12 / 24
|
The Senate is elected nationwide at-large, with half of the seats contested in each class individually | |
United States Senate | Upper house | 3 | 33 / 100
|
33 / 100
|
34 / 100
|
Every constituency has seats in two out of the three classes, with half of the seats contested in each of those classes individually |
12 of the 24 provincial legislatures have staggered elections:
In the federal Senate, half of the Senate's 76 members are eligible for re-election every 3 years. All members elected from states have a six-year term staggered over two election cycles; senators elected from the ACT and the NT have 3 year terms only. These half-Senate elections are usually held in conjunction with an election of all members for the Federal House of Representatives. There are rare instances in which a Federal election is held for the all members of the House of Representatives and all the members of the Senate at once, this is called a double dissolution election.
Three of Australia's five State Legislative Councils use staggered elections:
Local councils in Western Australia also have staggered elections.[8]
All six Legislative councils of states have staggered elections:
27 of the State Senates in the United States have staggered elections:[9]
Original source: https://en.wikipedia.org/wiki/Staggered elections.
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