Record-high votes for board declassification.

• Author: Ladd, Scott
• Position: CORPORATE GOVERNANCE - Brief article

The declassification of boards of directors has become one of the growing shareholder trends of the 201 2 season, as proposals on the subject arose as one of the notable highlights from the early proxy season.

According to a report in a recent edition of the Proxy Voting Fact Sheet, efforts to change the existing director election system for most boards--one in which directors are elected for three-year terms--often hinge on declassification designed to force a system of annual elections of all members. Classified board membership is built on staggered terms, which often can be used as a defensive measure to hold off a potential hostile takeover.

The Fact Sheet report is issued periodically by The Conference Board in collaboration with FactSet Research.

In the proxy season ending April 30, data from 500 annual meetings analyzed by the Fact Sheet found that, of 17 declassification proposals put to a vote at Russell 3000 companies during the first four months of the year, support for declassification was substantial. The average support level was 75.9 percent...