Series 79 practice questioneasyAnti-Takeover Defenses
A staggered board is best described as an anti-takeover defense in which:
- AOnly part of the board is elected each year✓ Correct answer
- BShareholders can call special meetings at any time
- CThe company issues new shares to dilute the acquirer’s stake
- DDirectors can unilaterally block all takeover proposals
Explanation
Why A — Only part of the board is elected each year
By staggering board elections, a hostile bidder cannot replace the entire board in one election, increasing takeover difficulty. Many confuse staggered boards with other anti-takeover provisions, so it’s important to know the distinction.
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