Director Rotation


DEFINITION of 'Director Rotation'

The cycle by which board members serve and vacate their positions. A policy regarding director rotation, or rotation of directors, may be included in a corporation's corporate governance policy and can specify the term that each member serves as well as the number of board positions that will be up for reelection each year.

BREAKING DOWN 'Director Rotation'

An example of a typical director rotation policy can be one that specifies that one-third of the directors will "retire by rotation" - vacate their positions - leaving them open for new directorship each specified period. The directors that have served the longest will be included in the one-third to retire by rotation. Directors are typically elected at the corporation's annual meeting.

  1. Board Of Directors - B Of D

    A group of individuals that are elected as, or elected to act ...
  2. Boardroom

    Besides the general definition as a meeting room in an office, ...
  3. Chair Of The Board - COB

    The most powerful member on the board of directors who provides ...
  4. Outside Director

    Any member of a company's board of directors who is not an employee ...
  5. Inside Director

    A board member who is an employee, officer or stakeholder in ...
  6. Employee Stock Option - ESO

    A stock option granted to specified employees of a company. ESOs ...
Related Articles
  1. Insurance

    Evaluating The Board Of Directors

    Corporate structure can tell you a lot about a company's potential. Learn more here.
  2. Active Trading Fundamentals

    Evaluating A Company's Management

    Financial statements don't tell you everything about a company's health. Investigate the management behind the numbers!
  3. Investing Basics

    What are the fiduciary responsibilities of board members?

    Find out what fiduciary duties a board of directors owes to the company and its shareholders, including the duties of care, good faith and loyalty.
  4. Economics

    What's a Horizontal Merger?

    A horizontal merger occurs when companies within the same industry merge.
  5. Investing

    A Breakdown Of Stock Buybacks

    Find out what these company programs achieve and what it means for stockholders.
  6. Economics

    3 Notorious American White Collar Criminals

    Learn about the crimes and punishments of some of the most infamous convicted white-collar crooks.
  7. Investing News

    Learn from These Big CEO Blunders

    A ceo can seem to have it all: power, influence and gravitas. But it can all erode — along with a company’s share price — in the wake of a scandal.
  8. Economics

    What Is Servant Leadership?

    Servant leadership emphasizes innovation, employee empowerment, and the development of leaders who serve an organization’s stakeholders first.
  9. Economics

    Understanding Corporate Culture

    Corporate culture encompasses the beliefs and behaviors that determine how a company and its employees interact and how they work with customers.
  10. Investing Basics

    Do Superstar CEOs Guarantee Better Returns?

    Do great CEOs mean better returns for investors? Here are 14 stocks that show it might just start at the top.
  1. Do ETFs have a board of directors?

    Yes. An exchange-traded fund (ETF) is a type of security that tracks a basket of assets or an index (such as an index fund), ... Read Full Answer >>
  2. What is the difference between a president and a chief executive officer? Can there ...

    In general, the chief executive officer (CEO) is thought of as the highest ranking officer in a company while the president ... Read Full Answer >>
  3. How do modern companies assess business risk?

    Before a business can assess or mitigate business risk, it must first identify probable or likely risks to its bottom line. ... Read Full Answer >>
  4. Why has emphasis on corporate governance grown in the 21st century?

    Corporate governance refers to operational practices, management protocols, and other governing rules or principles by which ... Read Full Answer >>
  5. What impact did the Sarbanes-Oxley Act have on corporate governance in the United ...

    After a prolonged period of corporate scandals involving large public companies from 2000 to 2002, the Sarbanes-Oxley Act ... Read Full Answer >>
  6. Why should investors research the C-suite executives of a company?

    C-suite executives are essential for creating and enacting overall firm strategy and are therefore an important aspect of ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  2. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
  3. Black Monday

    October 19, 1987, when the Dow Jones Industrial Average (DJIA) lost almost 22% in a single day. That event marked the beginning ...
  4. Monetary Policy

    Monetary policy is the actions of a central bank, currency board or other regulatory committee that determine the size and ...
  5. Indemnity

    Indemnity is compensation for damages or loss. Indemnity in the legal sense may also refer to an exemption from liability ...
  6. Discount Bond

    A bond that is issued for less than its par (or face) value, or a bond currently trading for less than its par value in the ...
Trading Center