Stakeholder Explained

"Stakeholder" is a broad term referring to a number of different bodies and entities that might be involved with a particular company. A stakeholder might be involved with this company insofar as the company's actions affect the stakeholder and also in that the stakeholder might be able to influence the company's actions.

Stakeholders can also be seen from a perspective of being critical to the fundamental operation and existence of the company, as without their existence the company might simply collapse and cease to function properly. Stakeholders might be both internal and external to the company, meaning that stakeholders might be individuals working within the company, be it as employees or managers, or they might be entities outside of the company, such as shareholders, customers, and creditors.

As these examples indicate, stakeholder is a very open, vague term, referring to a wide spectrum of different individuals who are all related to a company in entirely different capacities. A stakeholder might just as much be a government organization which was formed for the sake of environmental protection, which thus has a stake in a company's new lumber mill and whether or not it produces pollutants, as a stakeholder might be another company which provides supplies and resources to the company in which a stake is held.

Stakeholder, as a term, can sometimes be used more specifically to refer to those who have a clear, defined stake within the company, such that these stakeholders definitively hold power and influence over the operation of the company.