Director Rotation
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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. |
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Investopedia explains '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. |
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