Why might a company choose to employ a Porcupine Provision?

A company might choose to employ a Porcupine Provision primarily to protect against unsolicited takeover offers. This strategy is a form of defensive mechanism in corporate governance designed to deter hostile takeovers. By implementing such provisions, a company can make itself less attractive to potential acquirers or force any interested party to negotiate more favorable terms.

The name "Porcupine Provision" alludes to the idea of a porcupine's quills, which serve as a defense mechanism against predators. Similarly, this provision acts as a deterrent, making it more difficult or less appealing for outside entities to gain control over the company without the consent of the board and existing management. This can help preserve the existing management structure and strategic direction of the company, as well as protect the interests of shareholders and stakeholders.

Other options, while relevant to different strategic decisions, do not align with the specific intent of a Porcupine Provision. Enhancing customer loyalty, managing employee succession planning, and improving supply chain efficiency are all important aspects of business strategy but do not directly relate to defensive tactics against takeovers.