Stakeholder

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Financial Terms and Glossary

Stakeholder

A stakeholder is any individual, group, or entity that has an interest in or is affected by the operations and outcomes of an organization. Stakeholders can include shareholders, employees, customers, suppliers, governments, and communities. They may have varying degrees of influence or interest in the organization’s success, and businesses often consider stakeholder needs when making decisions, particularly in corporate governance and corporate social responsibility (CSR) contexts.

Example

In a company’s decision to expand internationally, stakeholders such as shareholders, employees, customers, and local communities may all be impacted and have a vested interest in the outcome.

Key points

• Any person, group, or entity with an interest in an organization’s activities.

• Can include shareholders, employees, customers, and the community.

• Stakeholder interests are considered in corporate governance and decision-making.

Quick Answers to Curious Questions

Who are the primary stakeholders in a corporation?

Shareholders, employees, customers, suppliers, and local communities are often the primary stakeholders in a corporation.

How do stakeholder interests influence corporate decision-making?

Companies consider stakeholder needs in their decisions to maintain strong relationships, improve reputation, and ensure long-term success.

What is the difference between a shareholder and a stakeholder?

Shareholders own shares in the company and are directly affected by financial performance, while stakeholders include anyone impacted by the company’s actions.