Staggered elections

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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 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.

Application in business[edit]

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]

Legislative bodies which use staggered elections[edit]

National[edit]

Chamber Type Classes % of seats up per election
Total 1 2 3
Argentine Chamber of Deputies Lower house 2
129 / 257
128 / 257
Argentine Senate Upper house 3
24 / 72
24 / 72
24 / 72
Australian Senate Upper house 2
40 / 76
36 / 76
Brazilian Senate Upper house 2
54 / 81
27 / 81
Senate of Chile Upper house 2
23 / 43
20 / 43
Senate of the Czech Republic Upper house 3
27 / 81
27 / 81
27 / 81
Senate (France) Upper house 2
174 / 348
174 / 348
Rajya Sabha (India) Upper house 3
77 / 245
78 / 245
78 / 245
House of Councillors (Japan) Upper house 2
121 / 245
121 / 245
Senate of Pakistan Upper house 2
52 / 104
52 / 104
Senate of the Philippines Upper house 2
12 / 24
12 / 24
United States Senate Upper house 3
33 / 100
33 / 100
34 / 100
  • In the Australian Senate, a double dissolution election can happen, where all seats are contested.
  • 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[edit]

Argentina[edit]

12 of the 24 provincial legislatures have staggered elections:

Australia[edit]

Three of Australia's five State Legislative Councils use staggered elections:

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

India[edit]

All six Legislative councils of states have staggered elections:


United States[edit]

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

Local[edit]

Historical usage[edit]

National[edit]

Local[edit]

See also[edit]

Notes[edit]

  1. ^ 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). "Towards the Declassification of S&P 500 Boards". Rochester, NY. Cite journal requires |journal= (help)
  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.
  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. ^ a b 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. ^ a b Consell General - L'abstenció al Principat d'Andorra
  11. ^ Direction des élections - Evolution de la législation électorale
  12. ^ Danmarks Statistik - Rigsdagsvalgene og folkeafstemningerne i april og maj 1953, p. 182
  13. ^ "Negentiende-eeuws districtenstelsel in Nederland". Parlement.com (in Dutch). Retrieved 18 February 2019.
  14. ^ "Geschiedenis kiesstelsel Eerste Kamer". Parlement.com (in Dutch). Retrieved 18 February 2019.
  15. ^ 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)