In finance, the words “stakeholder” and “shareholder” can seem interchangeable. However, they each hold intrinsic meaning and importance to a business’ operation. A shareholder is financially invested in a company, while a stakeholder is emotionally or strategically invested in the brand’s forward movement. Sometimes these groups overlap, but knowing the difference can help you determine your roles and responsibilities to a company in which you’re investing time or money.
What Is A Shareholder?
A shareholder, or stockholder, is a person who owns stock in a public company. These investors have rights to profits in the company correlated with the number of shares they own. They also have some say in the management of the company as partial owners. While shareholders are an integral part of a company’s success, they are not always emotionally invested and may trade or sell stock as the company grows.
What Is A Stakeholder?
A stakeholder is someone who is invested in the long-term future of the company for both financial and personal reasons. Investors are stakeholders because they are financially motivated to encourage the company’s success. However, they are not the only ones. Employees, partners, suppliers, and even customers are considered stakeholders if they rely on the company’s success for financial or personal gain.
How are Stakeholders and Shareholders the Same? How are They Different?
You could say that all shareholders are stakeholders, but not all stakeholders are shareholders. The primary difference between the two is that shareholders are owners, and stakeholders are connected to the company in a variety of ways. They may rely on the company for employment, or are loyal to the brand, or consider them an important B2B client. Stakeholders have one thing in common — they have a personal investment in the company that makes them motivated to support its growth.
What Is Your Responsibility as a Stakeholder?
Stakeholders are those who help a company succeed. They are the manpower and the community support that transforms a startup or small business into a thriving enterprise. Stakeholders are the loyal customers and early adopters, the loyal employees, and proud partners who make a dream come true.
What Is Your Responsibility as a Shareholder?
As a shareholder, your primary responsibility is to invest in companies that you want to support not just for financial reasons, but for personal reasons as well. While financial gain is the ultimate goal as an investor, you can make a bigger impact on society as a whole if you consider your role as a stakeholder just as important.
What is Values-Based Investing?
Values-based investing is a strategy that considers you as a stakeholder first. Instead of investing solely for financial return, you can choose companies with promising futures that also align with your personal mission and values. For example, by investing in green technologies, socially responsible companies, and medical technology you can make a positive impact on the world while making a profit.
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