Stakeholder vs. Shareholder: What’s the Difference?
The main difference between stakeholders and shareholders is that stakeholders have a broader interest in the company and its activities beyond their financial investment whereas shareholders own shares of the company and have a financial interest in its success.
Before we move to more differences, let’s first understand Stakeholder and Shareholder:
- Stakeholder: A Stakeholder is any person or group that has an interest in a company, including employees, customers, suppliers, the local community, and the environment.
- Shareholder: A Shareholder is a person or entity that owns one or more shares of a company’s stock, which entitles them to a portion of the company’s profits and gives them voting rights on certain corporate decisions.
Now, let’s get to Stakeholder vs Shareholder:
Major differences between Stakeholder and Shareholder
| Stakeholder | Shareholder |
|---|---|
| Stakeholders are interested in the company’s overall success, including social and environmental impact. | Shareholders are interested in the increase and protection of their financial investment. |
| Stakeholders may or may not have the ability to influence decision-making. | Shareholders have voting rights and can participate in certain corporate decisions. |
| Stakeholders are concerned with the long-term sustainability of the company and its impact. | Shareholders tend to prioritize maximizing profits and shareholder value. |
| Stakeholders may benefit from the company’s success in other ways, such as job security or access to community resources. | Shareholders expect to receive dividends and returns on their investment. |
| Stakeholders generally have a longer-term relationship with the company and its activities. | Shareholders can sell their shares in the company at any time. |
So, these are the main differences between the entities.
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