‘Whose Company Is It?’ New Insights into the Debate over Shareholders vs. Stakeholders

It is perhaps the core question in the ongoing debate over corporate governance: Does the corporation exist for the benefit of shareholders, or does it have other, equally important stakeholders, such as employees, customers and suppliers? A new study by Wharton finance professor Franklin Allen and two colleagues does not claim to provide a definitive answer, but it does show the various benefits of the stakeholder approach. It also demonstrates that the issue is not as settled as some researchers and business people in the United States, United Kingdom and other shareholder-oriented nations might think.

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