[3]: 159 In publicly held companies, staggered boards have the effect of making hostile takeover attempts more difficult; however, they are also associated with lower firm value.
[4]: 10 When a board is staggered, hostile bidders must win more than one proxy fight at successive shareholder meetings in order to exercise control of the target firm.
[5] In corporate cumulative voting systems, staggering has two basic effects: it makes it more difficult for a minority group to get directors elected, as the fewer directorships up for election requires a larger percent of the equity to win; and it makes takeover attempts less likely to succeed as it is harder to vote in a majority of new directors.
[6] Staggering may also however serve a more beneficial purpose, that is provide "institutional memory" — continuity in the board of directors — which may be significant for corporations with long-range projects and plans.
The Wall Street Journal reported in January 2007 that 2006 marked a key switch in the trend toward declassification or annual votes on all directors: more than half (55%) of the S&P 500 companies have declassified boards, compared with 47% in 2005.