In evaluating takeover proposals, which principle best aligns with fiduciary duties?

• A. The board should automatically reject any offer to protect current management.
• B. Accept any offer at face value to avoid litigation risk.
• C. The board should balance anti-takeover protections with maximizing shareholder value, including evaluating alternatives.
• D. The board should delay decisions indefinitely to avoid risk.

Answer: (D)

Fiduciary duties require the board to act in the best interests of shareholders by conducting a careful, value-maximizing process when evaluating takeover proposals. The board should balance anti-takeover protections with the goal of maximizing shareholder value and actively evaluate alternatives, such as other bidders or strategic options, to ensure the offer is fair and compelling. This means avoiding automatic rejection to shield current management, avoiding acceptance without due diligence, and steering clear of indefinite delays. Instead, run a structured process, seek independent analyses, and choose the path that best enhances value for shareholders while ensuring fair treatment.