Shareholders vs Stakeholders

• Shareholders are individuals who own equity in a limited company through buying shares.
• Stakeholders include anyone with an interest in the business, including shareholders.
• Stakeholders can be categorized as internal (employees, managers, owners) or external (customers, society, government, suppliers, creditors).
• There is a debate between the shareholder concept (businesses should prioritize shareholder interests) and the stakeholder concept (businesses should consider the views of all stakeholders).

The main difference between shareholders and stakeholders is that shareholders are specifically those who own equity in a limited company, while stakeholders include anyone with an interest in the business. Stakeholders can be categorized as internal or external, and each group has its own objectives. Internal stakeholders, such as employees and managers, are interested in good pay, working conditions, job satisfaction, and business growth. Owners are primarily interested in profits. External stakeholders, like shareholders, customers, society, the local community, government, suppliers, and creditors, have various interests such as profitability, value for money, sustainability, employment opportunities, prompt payment, and tax revenue. Conflicts can arise when these objectives clash. The shareholder concept argues that businesses should prioritize shareholder interests and focus on making profits. The stakeholder concept argues that all stakeholder views should be considered for a more sustainable approach. Keeping key stakeholders happy can contribute to long-term business success and benefit shareholders as well.