We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.
Finance

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

What is a Classified Board?

Malcolm Tatum
By
Updated: Jan 25, 2024
Views: 29,612
Share

Also known as a staggered board, a classified board is a board of directors which has only a limited number of seats on the board up for election in any given calendar year. This approach allows for the ongoing rotation of members on the board, while still managing to retain some degree of continuity from one year to the next.

The concept of a classified board involves establishing the process whereby individuals are elected and serve for a specific amount of time on the board. Each seat on the board of directors is assigned a class that denotes how long the individual occupying that seat will serve. For example, someone who is elected to a Class I seat will serve for a twelve-month period, while someone who is elected to a Class III seat will serve for three consecutive years. The end result is that by staggering the seat elections, a few seats are up for election each year, while the majority remain to serve for at least one more year, giving the board a sense of stability and continuity.

One of the benefits of a classified board is that there is a regular injection of fresh concepts and ideas, since at least a few seats will come up for election each year. This helps to prevent the board from growing stale and out of touch with the constituency that make up the organization that the board governs. The approach also helps to minimize the potential for a select few in the organization from seizing and maintaining control of the board for long periods of time, a situation that can lead to a decline in the function and productivity of the organization.

At the same time, the classified board approach also makes it much harder for hostile takeovers to occur. When seen as an anti-takeover measure, staggering the board seats makes it harder for hostile bidders to secure the support necessary to take over the board and thus initiate the process of seizing control of the organization. This approach works equally well with corporations and non-profit entities that operate with an elected board of directors.

It is not unusual for the provisions that establish the classified board to also put limits on the number of successive terms that any one board member can serve. For example, the bylaws of the organization may allow an individual to serve two successive three-year terms, assuming the move has the support of the organization members. However, that individual would not be eligible to serve an additional three years in succession, or to run for a one-year seat. This approach is also considered to be a safeguard from the creation of a power base within the board of directors that could ultimately undermine the effectiveness of the board and the organization it governs.

Share
WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Malcolm Tatum
By Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing to become a full-time freelance writer. He has contributed articles to a variety of print and online publications, including WiseGeek, and his work has also been featured in poetry collections, devotional anthologies, and newspapers. When not writing, Malcolm enjoys collecting vinyl records, following minor league baseball, and cycling.

Editors' Picks

Discussion Comments
Malcolm Tatum
Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing...
Learn more
Share
https://www.wise-geek.com/what-is-a-classified-board.htm
Copy this link
WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.