Small business need-to-know and news-to-watch. What is happening in the 2012 proxy season? Read “classified versus declassified” board of directors direction.
Excerpt: In classified boards, members are divided into classes with directors in each class serving staggered terms (typically three years) so that only one class stands for election each year. Classification is used as a defensive measure to prevent hostile takeovers: when a board is staggered, hostile bidders must win more than one proxy contest at successive shareholder meetings to exercise control of the target. Proposals on declassification seek to discontinue this board structure in favor of a system of annual election for all members