Editing Openai/68df4a3a-428c-8013-a459-5cff8e17edde (section)

===== - In a hostile takeover, an acquiring firm tries to replace the board quickly with directors who will approve the acquisition. =====
* With a non-staggered board, the entire board could be replaced in one annual meeting if the acquirer secures majority shareholder support.
* With a staggered board, the acquirer can only replace a fraction of directors per year. To gain majority control, it would take multiple years of elections.
* This delay: - Increases the cost and uncertainty of a takeover. - Gives management more time to negotiate or seek alternative options. - Discourages opportunistic or aggressive takeover attempts.

✅ In summary:
* For minority shareholders: Staggering reduces the effectiveness of cumulative voting because fewer board seats are available at each election.
* For corporations: It provides continuity, stability, and shields management from abrupt changes.
* Against hostile takeovers: It acts as a defense mechanism, making it harder for outside groups to seize control quickly, thereby giving the company time to resist or negotiate better terms.

Would you like me to illustrate this with a numerical example (showing exactly how staggering changes the math of cumulative voting for minorities)?