What are the differences between shareholder and stakeholder?

Shareholders are individuals (or groups of individuals, companies, institutions, etc.), who own a part of a business through the ownership of its shares. A stakeholder is an individual (or a group), that is involved in, or affected by a business, in any way. These can be owners, shareholders, employees, but also customers, supply chain partners, governments, etc. Any business has more stakeholders than shareholders, and the incentives of stakeholders are more diverse than those of shareholders. Shareholders have a financial interest in profit, and also have more short-term scope relative to other stakeholders, as they can always sell their shares. Shareholders also have a right to vote and directly affect the decisions made by the company, while most of other stakeholders do not.

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Answered by Andrej S. Business Studies tutor

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