This report from the Corporate Governance Insights Series of the International Finance Corporation (part of the World Bank family) provides an interview with. Dr. Franklin Allen is a professor of finance and economics at the University of Pennsylvania’s Wharton School.

He suggests that there is a major difference between managing a corporation for shareholder value and managing for stakeholder value. The results of such choices in management objectives of corporations have important implications for national economic growth and stability.

He illustrates his point noting that unemployment grew much more rapidly in the United States following the 2008 financial crisis than it did in Germany. German firms, which include worker representatives of the boards manage in such a way as to dismiss fewer workers in financial downturns than do American firms which do not have worker reps on their boards. Government policies can influence such choices in corporate management.