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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 forone-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 ofcumulative voting.[1] Manycompanies use staggered elections as a tool to preventtakeover attempts. Some legislative bodies (most commonlyupper houses) use staggered elections, as do some public bodies, such as theSecurities and Exchange Commission.
Astaggered board of directors orclassified board is a prominent practice inUS corporate law governing theboard of directors of acompany,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 hostiletakeover 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 oneproxy fight at successive shareholder meetings in order to exercise control of the targetfirm. Particularly in combination with apoison 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 corporatecumulative 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 | The sixstates ordinarily elect half of their 12 senators at each election, while the 4 senators representing the territories are elected at each election | |
| 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 nationwideat-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 federalSenate, 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 theACT and theNT have 3 year terms only. These half-Senate elections are usually held in conjunction with anelection of all members for theFederal 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 adouble 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]
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