Philadelphia partner Doug Raymond’s latest column for Directors & Boards, written with the assistance of Philadelphia associate Kevin Walsh, was published in the June 2012 issue of the publication.
Doug, a partner in the firm’s Corporate and Securities Practice Group, notes that in recent proxy seasons, having been largely successful in the effort to eliminate plurality voting among large cap companies, “institutional forces are leading shareholder groups increasingly to oppose staggered boards.”
Doug explains the concept of a staggered board and its pros and cons. He explains the “important new dynamic in shareholder elections” that has arisen as a result of the elimination of a staggered board in combination with the change from plurality voting to majority voting.
Doug says that regardless of whether a company has a staggered board or plurality director elections, “boards should remain cognizant that shareholders are giving more attention to the mechanics of electing directors and that this imposes new risks and challenges for which directors should be prepared.”