A general term devised to indicate all those who might have a legitimate interest in receiving financial information about a business because they have a ‘stake’ in it.
A stakeholder is a party that has an interest in a company and can either affect or be affected by the business.
- A person holding the stakes of bettors, with the responsibility of delivering the pot to the winner of the bet.
- An escrow agent or custodian.
- A person filing an interpleader action, such as a garnishee or trustee, who acknowledges possession of property that is owed to one or more of several other claimants.
- A person or organisation with a legitimate interest in a given situation, action or enterprise.
A person, group or organisation that has interest or concern in an organisation.
Any individual, group or business with a vested interest (a stake) in the success of an organisation is considered to be a stakeholder. A stakeholder is typically concerned with an organisation delivering intended results and meeting its financial objectives. In general, a stakeholder can be one of two types: internal (from within an organisation) or external (outside of an organisation). Examples of a stakeholder are an owner, manager, shareholder, investor, employee, customer, partner and/or supplier, among others. A stakeholder may contribute directly or indirectly to an organisation’s business activities. Other than a traditional business, a stakeholder may also be concerned with the outcome of a specific project, effort or activity, such as a community development project or the delivery of local health services. A stakeholder usually stands to gain or lose depending on the decisions taken or policies implemented.
Stakeholders can affect or be affected by the organisation’s actions, objectives and policies.
Some examples of key stakeholders are creditors, directors, employees, government (and its agencies), owners (shareholders), suppliers, unions, and the community from which the business draws its resources.
A stakeholder is any individual, group, or organization that has an interest or “stake” in a particular project, organisation, or decision. Stakeholders may include employees, customers, shareholders, suppliers, government agencies, communities, and others affected by or involved in the activities of an entity.
Stakeholders play various roles in business, including influencing decision-making, providing resources or support, advocating for their interests, and holding organisations accountable for their actions and impacts on society and the environment.
Stakeholder engagement is essential for building trust, fostering collaboration, mitigating risks, and ensuring the long-term success and sustainability of organisations. Engaging with stakeholders helps identify their needs, concerns, and expectations, leading to more informed decision-making and better outcomes.
Primary stakeholders in a business typically include shareholders, customers, employees, and suppliers. These stakeholders have a direct financial or operational interest in the organisation and are directly impacted by its activities and performance
Stakeholders can be categorized into various groups based on their relationship to the organisation. Common types of stakeholders include internal stakeholders (e.g., employees, managers) and external stakeholders (e.g., customers, investors, regulators, community members).
Organisations may identify stakeholders by conducting stakeholder analysis, which involves identifying individuals or groups affected by or affecting the organisation’s activities, assessing their interests, influence, and potential impact, and determining strategies for engaging with them effectively.
Stakeholder management involves identifying, prioritising, and addressing the needs and expectations of stakeholders throughout the life cycle of a project or organisation. It also includes such activities as communication, consultation, collaboration, and conflict resolution.
Effective stakeholder engagement involves establishing clear communication channels, soliciting feedback and input, addressing concerns and grievances, involving stakeholders in decision-making processes, and fostering open and transparent dialogue.
Some of the benefits of stakeholder engagement include improved decision-making, enhanced reputation and trust, reduced conflicts and risks, increased innovation and creativity, and better alignment with societal and environmental expectations.
Organisations can measure the success of stakeholder engagement efforts through various metrics, such as stakeholder satisfaction surveys, feedback mechanisms, stakeholder participation rates, resolution of issues, and the achievement of mutually beneficial outcomes.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 29th March, 2024.
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