Stagger System


DEFINITION of 'Stagger System'

A method of electing a company's board of directors that puts up only part of the board for re-election in any one year. This method contrasts the system in which all board members go up for re-election annually.

BREAKING DOWN 'Stagger System'

Supporters of shareholder rights argue that the stagger system prevents continuity in the boardroom and poses an obstacle in the communication between shareholders and directors. If a director or a group of directors is negatively impacting shareholder value, the stagger system can prolong the damage since shareholders may not be able simply to vote out the undesirable board members at the next annual general meeting.

  1. Board Of Directors - B Of D

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

    Any person, company or other institution that owns at least one ...
  3. Annual General Meeting - AGM

    A mandatory, public yearly gathering of a publicly traded company's ...
  4. Stakeholder

    A party that has an interest in an enterprise or project. The ...
  5. Corporate Governance

    The system of rules, practices and processes by which a company ...
  6. Employee Stock Option - ESO

    A stock option granted to specified employees of a company. ESOs ...
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