The directors of Healthways have moved to declassify the company's board after shareholders voted this past spring in favor of a pension fund's push to do so.
The New York State Common Retirement Fund, which owns Healthways shares worth about $3.5 million today, early this year said it wanted Franklin-based Healthways to join a growing governance trend of having no tiered board and electing all directors each year. Classified boards serve as an effective tool against takeover attempts and the New York State Common Retirement Fund's proposal this morning said, "A staggered board has been found to be one of six entrenching mechanisms that are associated with lower firm valuation."
Investors agreed wholeheartedly with the New York fund, voting on the last day of May in favor of declassification to the tune of 91 percent. In a short statement Monday afternoon, Healthways said its board voted unanimously to begin declassifying the board next spring by having returning directors stand for one-year terms. That way, the entire board will be working on year-to-year contracts by the spring of 2015.
Shares of Healthways (Ticker: HWAY) were trading up about 1 percent to $9.62 in afternoon trading. Year to date, they have risen about 40 percent.