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.

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]

• 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.

12 of the 24 provincial legislatures have staggered elections:

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]

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

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

• 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]

• Andorra: communal councils (1867–1979)^[11]
• Argentina:
  • Legislature of Córdoba (until 2001)
  • Chamber of Deputies of Santa Cruz (until 1998)
  • Chamber of Deputies of Santiago del Estero (until 2002)
  • Legislature of Tucumán (until 1989)
• Belgium: municipal councils and provincial councils (1836–1914)
• Spain: municipal councils and provincial deputations (until 1923)
• Japan: prefectural assemblies (1878–1890s)^[16]

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