A stakeholder is any individual or organisation that is affected by the
activities of a business.
They may have a direct or indirect interest in the business, and may be in
contact with the business on a daily basis, or may just occasionally.
The main stakeholders are:
Shareholders (not for a sole trader or partnership though) – they will be
interested in their dividends and capital growth of their shares.
Management and employees – they will be interested in their job security,
prospects and pay.
Customers and suppliers.
Banks and other financial organisations lending money to the business.
Government – especially the Inland Revenue and the Customs and Excise
who will be collecting tax from them.
Trade Unions – who will represent the interests of the workers.
Pressure Groups – who are interested in whether the business is acting
appropriately towards their area of interest.
Stakeholders versus Shareholders
Often the aims and objectives of the stakeholders are not the same as
shareholders and they come into conflict.
The conflict often arises because while shareholders want short-term profits,
the other stakeholders’ desires tend to cost money and reduce profits. The
owners often have to balance their own wishes against those of the other
stakeholders or risk losing their ability to generate future profits (e.g. the
workers may go on strike or the customers refuse to buy the company’s