§ 14451 Director Term Staggering Rules

This law says that if a company's directors are chosen for more than one year, their terms should be set up so that not all of them end at the same time. This way, only some directors are replaced each year.

Key Takeaways

•Directors can be elected for up to 3 years.
•If terms are longer than 1 year, they should be staggered so that an equal number expire each year.
•This helps keep some experienced directors on the board at all times.

Example

A company has 6 directors, and each is elected for a 3-year term.

Instead of all 6 directors being replaced after 3 years, the company would set it up so that 2 directors are replaced every year. This way, the company always has experienced directors.

Directors may be elected for a term of three years or less. If directors are elected for terms in excess of one year their terms of office shall be staggered so that insofar as possible an equal number of such terms shall expire each year. (Repealed and added by Stats. 1979, Ch. 112.)

Key Takeaways

•Directors can be elected for up to 3 years.
•If terms are longer than 1 year, they should be staggered so that an equal number expire each year.
•This helps keep some experienced directors on the board at all times.

Example

A company has 6 directors, and each is elected for a 3-year term.

Instead of all 6 directors being replaced after 3 years, the company would set it up so that 2 directors are replaced every year. This way, the company always has experienced directors.

Key Takeaways

Example

Key Terms

References

§ 14451 Director Term Staggering Rules

Key Takeaways

Example

Key Terms

References

Key Takeaways

Example

Key Terms

Related Statutes

References

Key Takeaways

Example

Key Terms

Related Statutes

References