Editing Openai/68df4a3a-428c-8013-a459-5cff8e17edde (section)

=== Assistant: Good question — in the context of common stock and shareholder voting, “staggering” or a staggered board refers to how … ===
Good question — in the context of common stock and shareholder voting, “staggering” (or a staggered board) refers to how a company structures the election of its board of directors.

===== A staggered board of directors means that only a portion of the board members are elected at each annual shareholder meeting, rather than electing the entire board at once. Typically, directors are divided into classes (often three), with each class serving multi-year terms (e.g., three years), and only one class is up for election in a given year. =====

===== 1. Corporate Stability - By staggering elections, the company ensures continuity and stability in governance. Not all directors can be replaced in a single election cycle. =====
# Defense Against Takeovers - A staggered board makes it more difficult for hostile bidders or activist investors to quickly gain control of the board, since they would need to win elections across multiple years.
# Reduced Shareholder Influence - While this can benefit management by providing stability, it can also limit shareholders’ ability to quickly change leadership, which is sometimes criticized as a way for boards to entrench themselves.

===== Suppose a company has 9 directors divided into 3 classes: =====
* Class I serves from Year 1–3
* Class II serves from Year 2–4
* Class III serves from Year 3–5

At each annual meeting, only 3 directors (one class) are up for election.

✅ In summary:
Staggering is the practice of dividing the board of directors into different classes with overlapping terms, so that only a fraction of the board is elected each year. This promotes continuity but also reduces shareholders’ ability to replace the entire board quickly.

Would you like me to also compare staggered vs. non-staggered boards in a table (like I did for the voting systems)?