Staggered elections

Short description: Elections where only a part of the body is elected at a time

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.

## Contents

* 1 Application in business
* 2 Use in legislative bodies
* 2.1 National
* 2.2 State
* 2.2.1 Argentina
* 2.2.2 Australia
* 2.2.3 India
* 2.2.4 United States
* 2.3 Local
* 3 Historical usage
* 3.1 National
* 3.2 Local
* 4 See also
* 5 Notes

## Application in business

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]

## Use in legislative bodies

### National

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

* In the Australian Senate, a double dissolution election can happen, where all seats are contested. The 4 Territory seats are contested at each election.
* Some chambers do not have all of its seats elected, such as in the Rajya Sabha where 12 seats are appointed by the president.
* By-elections (special elections) can be held concurrently with general elections, increasing the number of seats up in an election.

### State

#### Argentina

12 of the 24 provincial legislatures have staggered elections:

* Buenos Aires: Chamber of Deputies and Senate
* Buenos Aires City: Unicameral legislature
* Catamarca: Chamber of Deputies and Senate
* Chaco: Unicameral legislature
* Corrientes: Chamber of Deputies and Senate
* Formosa: Unicameral legislature
* Jujuy: Unicameral legislature
* La Rioja: Unicameral legislature
* Mendoza: Chamber of Deputies and Senate
* Misiones: Unicameral legislature
* Salta: Chamber of Deputies and Senate
* San Luis: Chamber of Deputies and Senate

#### Australia

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:

* New South Wales Legislative Council
* South Australian Legislative Council
* Tasmanian Legislative Council

Local councils in Western Australia also have staggered elections.[8]

#### India

All six Legislative councils of states have staggered elections:

* Andhra Pradesh Legislative Council
* Bihar Legislative Council
* Karnataka Legislative Council
* Maharashtra Legislative Council
* Telangana Legislative Council
* Uttar Pradesh Legislative Council

#### United States

27 of the State Senates in the United States have staggered elections:[9]

* 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 Legislature
* 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

* Some local councils in the United Kingdom , although the Electoral Commission in England has recommended that councils standardise on a 4-yearly whole council election cycle.[10]

## Historical usage

### National

* General Council of Andorra (1867–1979)[11]
* Chamber of Representatives and Senate of Belgium (1835–1919)[12]
* Senate and Chamber of Deputies of Bolivia (1944–1964)
* Legislative Assembly of Costa Rica (1913–1948)
* Senate and Chamber of Representatives of Cuba (1902–1950)
* Landsting of Denmark (1915–1953)[13]
* National Assembly of Ecuador (1945–1970, 1984–1998)
* National Congress of Honduras (until 1942)
* Chamber of Deputies of Luxembourg (1922–1951)
* House of Representatives (1849–1888)[14] and Senate (1848–1983)[15] of the Netherlands
* National Congress of Nicaragua (1912–1932)
* First Chamber of Sweden (1867–1970)

### Local

* Andorra: communal councils (1867–1979)[11]
* Belgium: municipal councils and provincial councils (1836–1914)
* Spain : municipal councils and provincial deputations (until 1923)
* Japan : prefectural assemblies (1878–1890s)[16]

## See also

* Industrial organization
* Mergers and acquisitions
* Takeover, including hostile takeover
* United Kingdom company law
* United States corporate law

## Notes

1. ↑ "Archived copy". http://www.stroock.com/SiteFiles/Pub341.pdf.
2. ↑ See Faleye,O., 2007, Classified Boards, Firm value, and Managerial Entrenchment, Journal of Financial Economics83, 501-529.
3. ↑ Bebchuk, Lucian A.; Hirst, Scott; Rhee, June (2014-02-01) (in en). Towards the Declassification of S&P 500 Boards. Rochester, NY. https://papers.ssrn.com/abstract=2400652.
4. ↑ Hirst, Scott; Bebchuk, Lucian (2010-01-01). "Private Ordering and the Proxy Access Debate". The Harvard John M. Olin Discussion Paper Series No. 653. https://scholarship.law.bu.edu/faculty_scholarship/338.
5. ↑ 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).
6. ↑ 6.0 6.1 Hillier, David; Ross, Stephen; Westerfield, Randolph; Jaffe, Jeffrey; Jordan, Bradford (2013). Corporate Finance (2nd European ed.). Berkshire: McGraw-Hill Education. pp. 34–35. ISBN 9780077139148.
7. ↑ Jared A. Favole, "Big Firms Increasingly Declassify Boards", The Wall Street Journal, Jan. 10, 2007.
8. ↑ "Local Government Elections", Western Australian Electoral Commission.
9. ↑ "Length of terms of state senators", Ballotpedia, Accessed 24 August 2016.
10. ↑ Electoral Commission https://democracy.peterborough.gov.uk/documents/s47107/13a. Appendix A Electoral Commission The cycle of local government elections in England.pdf
11. ↑ 11.0 11.1 Consell General - L'abstenció al Principat d'Andorra
12. ↑ "Direction des élections - Evolution de la législation électorale". http://www.elections.fgov.be/index.php?id=2101.
13. ↑ Danmarks Statistik - Rigsdagsvalgene og folkeafstemningerne i april og maj 1953, p. 182
14. ↑ "Negentiende-eeuws districtenstelsel in Nederland" (in nl). https://www.parlement.com/id/vglrdyd9plkn/negentiende_eeuws_districtenstelsel_in.
15. ↑ "Geschiedenis kiesstelsel Eerste Kamer" (in nl). https://www.parlement.com/id/vhnnmt7mlkw5/geschiedenis_kiesstelsel_eerste_kamer.
16. ↑ Akio Kamiko (2010, bilingual): 近代地方行政の黎明期(1868-1880年), pp. 7–8: 府県会規則 /The Start of Modern Local Government (1868 – 1880), pp. 10–11: Prefectural Assembly Law (Fukenkai Kisoku)

* v
* t
* e

Corporate finance and investment banking

Capital structure|

* Convertible debt
* Exchangeable debt
* Mezzanine debt
* Pari passu
* Preferred equity
* Second lien debt
* Senior debt
* Senior secured debt
* Shareholder loan
* Stock
* Subordinated debt
* Warrant

Transactions
(terms/conditions)|

| Equity offerings|

* At-the-market offering
* Book building
* Bookrunner
* Bought deal
* Bought out deal
* Corporate spin-off
* Equity carve-out
* Follow-on offering
* Greenshoe
* Reverse
* Initial public offering
* Private placement
* Public offering
* Rights issue
* Seasoned equity offering
* Secondary market offering
* Underwriting

|

Mergers and
acquisitions|

* Buy side
* Control premium
* Demerger
* Divestment
* Drag-along right
* Management due diligence
* Managerial entrenchment
* Minority discount
* Pitch book
* Pre-emption right
* Proxy fight
* Post-merger integration
* Sell side
* Shareholder rights plan
* Special-purpose entity
* Special situation
* Squeeze-out
* Staggered board of directors
* Stock swap
* Super-majority amendment
* Tag-along right
* Takeover
* Reverse
* Tender offer

Leverage|

* Debt restructuring
* Debtor-in-possession financing
* Financial sponsor
* Leveraged buyout
* Leveraged recapitalization
* High-yield debt
* Private equity
* Project finance

Valuation|

* Accretion/dilution analysis
* Adjusted present value
* Associate company
* Business valuation
* Conglomerate discount
* Cost of capital
* Weighted average
* Discounted cash flow
* Economic value added
* Enterprise value
* Fairness opinion
* Financial modeling
* Free cash flow
* Free cash flow to equity
* Market value added
* Minority interest
* Modigliani–Miller theorem
* Net present value
* Pure play
* Real options
* Residual income
* Stock valuation
* Sum-of-the-parts analysis
* Tax shield
* Terminal value
* Valuation using multiples

* List of investment banks
* Outline of finance

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