How board structure affects social performance and stakeholder management: an example from classified boards

Jill A. Brown, Anne Anderson and Sami Ghaddar

Chapter 5 in Research Handbook on Corporate Governance and Ethics, 2023, pp 86-111 from Edward Elgar Publishing

Abstract: In this chapter, we review the relationship between board structure, decision-making and accountability in the context of unitary/one-tier versus classified/staggered boards. Unitary boards elect directors to one-year terms. Classified boards create separate ‘classes’ of directors who are elected for multiple-year terms, with one ‘class’ coming up for re-election each year. Proponents of classified boards say they strengthen a company’s long-term strategy by increasing focus and dedication, while advocates of unitary boards highlight how annual elections can increase accountability and responsiveness to shareholders. With a stakeholder theory lens, we introduce empirical evidence that classified boards perform better in social performance than unitary boards, suggesting that board structure can provide insight into board decision-making processes for social accountability.

Keywords: Business and Management; Economics and Finance; Environment (search for similar items in EconPapers)
Date: 2023
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