\n \n \n <\/a>\n <\/div>\n \nMeanwhile, external stakeholders are those from outside the company. They can include customers, government bodies, agencies, and even the general public. While they are not part of the inner business structure, they still have certain powers over its activities.<\/p>\n
The role of a stakeholder<\/h3>\n We\u2019ve established that stakeholder groups can vary widely. Therefore, the specific role of each group will depend on who they are and their relation to the company. Let\u2019s take a look at some common stakeholder examples.<\/p>\n
Shareholders<\/h4>\n While not all stakeholders are shareholders, all shareholders are stakeholders. They are the owners, they provide the company with financial backing, and they make decisions concerning certain aspects of the company (such as its articles of association). They are also beneficiaries of the company’s success.<\/p>\n
Employees<\/h4>\n The company impacts employees in many ways, such as their salaries, working conditions and continued employment. Employees also have the power to shape the workplace culture.<\/p>\n
Customers<\/h4>\n Customers are essential external stakeholders. They have an interest in the company\u2019s products and services and, for the company, are a key revenue source.<\/p>\n
Government bodies<\/h4>\n Various government bodies impose specific rules and regulations on different types of companies, thus affecting how they operate. For example, all UK companies must file annual accounts with Companies House and must pay certain business taxes to HMRC.<\/p>\n
Suppliers, agencies, contractors, and freelancers<\/h4>\n Many businesses outsource some of their processes, such as marketing, accounting, or design. Whether it\u2019s an agency, contractor, or freelancer, these individuals have a direct relationship with the company and rely on it financially. In turn, the company relies on the clients\u2019 services to generate value and help the business progress.<\/p>\n
General public<\/h4>\n Finally, there\u2019s the general public. Not only do they rely on a company\u2019s products and services (as customers), but they may also be indirectly impacted by them (even if they don\u2019t use the products and services themselves).<\/p>\n
The general public can also influence the company, driving trends and demands. Certain communities, such as environmental unions or social movement groups can also impact a company\u2019s operations.<\/p>\n
Why understanding your stakeholders is crucial<\/h3>\n All companies should be aware of their different stakeholders, as those stakeholders\u2019 demands or interests may impact the company’s success and operations.<\/p>\n
If a company neglects the needs of certain stakeholders, it may be negatively affected. For example, suppose they neglect the needs of their own suppliers. In that case, those suppliers may look to end their relationship with the company, potentially preventing the company from carrying on business.<\/p>\n
<\/div>\n \n
Furthermore, company directors have a legal obligation to consider the company\u2019s different stakeholders when making decisions. This is specifically detailed in section 172 of the Companies Act 2006, which demands directors promote the company’s success. Part of that success includes having regard for the company\u2019s stakeholders when making decisions – including its employees, the local community, and the environment.<\/p>\n
Key differences<\/h3>\n Both groups share some similarities; however, a significant difference between stakeholders is their actual ownership of a company.<\/p>\n
Whereas shareholders own a company, other stakeholders usually do not (unless they also happen to be shareholders). That\u2019s not to say other stakeholders don\u2019t have any control. While they don\u2019t hold any company shares, they do have the power to influence a business\u2019 processes and be affected by them.<\/p>\n
Another important distinction is priorities. Shareholders sometimes prioritise profit, while other stakeholders may be more inclined to concern themselves with the company\u2019s long-term performance. They might aim to maintain strong supplier relationships, create a positive workplace environment for staff, or improve customer satisfaction. Some of these initiatives may ultimately be financially advantageous, but the main priority lies in the broader benefit to the company.<\/p>\n
Ultimately, different stakeholders in different companies will have other priorities. What connects them is that they have an interest in, or are affected by, the company and its operations.<\/p>\n
Thanks for reading<\/h3>\n It\u2019s easy to confuse the terms \u2018shareholder\u2019 and \u2018stakeholder\u2019. They are often used interchangeably, but that\u2019s not strictly correct. The key takeaway is that shareholders own the company, and stakeholders have an interest in its activities.<\/p>\n
We hope you found this blog helpful. If you have any questions, please post them below.<\/p>\n"},"excerpt":{"rendered":"
As a business owner, you\u2019ll come across many corporate buzzwords. Two such words are \u2018shareholder\u2019 and \u2018stakeholder\u2019. You might already know what these mean, or you may have an idea, but for some entrepreneurs, they\u2019ll be entirely new concepts. In this post, we explain the differences and similarities between stakeholders and shareholders, and the roles…<\/p>\n","protected":false},"author":27,"featured_media":12420,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false},"categories":[141],"tags":[],"class_list":["post-12382","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-shares-shareholders","category-141","description-off"],"acf":[],"yoast_head":"\n
Shareholder vs Stakeholder - What's the Difference? | QCF<\/title>\n \n \n \n \n \n \n \n \n \n \n \n \n\t \n\t \n\t \n \n \n\t \n\t \n\t \n","yoast_head_json":{"title":"Shareholder vs Stakeholder - What's the Difference? | QCF","description":"People often mix up 'shareholders' and 'stakeholders'; we explain their differences and the roles they play in a company. Let's get started.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/shareholder-vs-stakeholder\/","og_locale":"en_GB","og_type":"article","og_title":"Shareholder vs stakeholder - what\u2019s the difference?","og_description":"People often mix up 'shareholders' and 'stakeholders'; we explain their differences and the roles they play in a company. 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