Charles Schwab ( SCH) set plans to declassify its board, replacing the current staggered three-year election schedule with annual voting.

The San Francisco online broker said it would seek shareholder approval at its 2006 annual meeting.

"The decision to submit a binding resolution to the stockholders follows careful deliberations by both the Nominating and Corporate Governance Committee and the Board of Directors regarding Board structure and the views of stockholders," said CEO Charles R. Schwab.

Corporate governance types like declassified boards better because they say annual elections encourage accountability to shareholders.

On Friday, Schwab rose 20 cents to $14.60.

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