Who does the company exist for? The shareholders or stakeholders such as employees, customers and suppliers?

The answers are by no means clear if a new paper co-authored by Wharton finance professor Franklin Allen is anything to go by.

Using a mathematical model, the paper finds that stakeholder firms have lower output and higher prices which, irony of ironies, makes them more valuable than companies that just exist for their shareholders.

The downside is that consumers have to pay higher prices.

Also, the applicability of the model varies around the world. For example, only 3 per cent of Japanese managers say companies should maintain dividend payments to stockholders even if it means the company has to lay off workers. In other words, in Japan, the first priority is with employees. That compares with 41 per cent in Germany, 40 per cent in France, and 89 per cent in both the United States and the United Kingdom. And in Japan, 97 per cent of respondents said a company exists for all stakeholders, compared with 83 per cent in Germany, 78 per cent in France, 76 per cent in the United States and 71 per cent in the United Kingdom.

All of which suggests that it's impossible to bring in universal rules for corporate governance that are hard and fast. It depends on the company, and its context.