Which one of the following statements is TRUE?
A) A classified board is one in which the board members have staggered terms.
B) One tool of corporate governance is a company's tax avoidance strategy.
C) One tool of corporate governance is choosing a good investment banker.
D) A classified board is one in which the board members serve anonymously.
E) A classified board is one in which an announcement requesting applications for board members appears in the newspaper.

Question

Quizplus · Accepted Answer

A classified board is one in which the board members have staggered terms, meaning that only a portion of the board is up for re-election each year rather than the entire board. This is seen as a tool of corporate governance as it can prevent a complete turnover of the board and ensure continuity and stability. Tax avoidance strategies and investment bankers are not typically seen as tools of corporate governance, but rather as financial and strategic decisions made by the company. The other options are not accurate descriptions of a classified board.

Which One of the Following Statements Is TRUE