Stakeholders:

 Stakeholders and their influence on corporate governance:

Every organization has stakeholders.A stakeholder has been defined as 

"Any group or individual who can affect or [be] affected by the achievement of an organization's objective".

                                                                                                                                                  (by Freeman:1984)

 

An important part of this definition is that a stakeholder may be:

• be affected by what the organization does

• affect what the organization does,or

• both be affected by and affect what the organization does.

 

A stakeholder in a company is someone who has a 'stake' in the company and an interest in what the company does.

• Company must have to offer something to all its stakeholders.If a company doesnot offer anything to its stakeholders,the stakeholders might cease to have an interest in it.

• All the stakeholders in a company have some expectations from the company or an organization.

• If a company wishes to remain associated with its stakeholders,it must do something to satisfy these expectations.

The expectations of different groups of stakeholders are not the same,and they are often inconsistent with eachother.One of the objective of corporate governance should be to provide enough satisfaction for each stakeholder group.

Stakeholders group in a company include:

• Shareholder:

       Shareholders expect a reasonable return on their investment in the company.

• Employees:

       Employees expect fair wages and salaries and sometime job security career development. 

• Director & Management: 

       The director and management have to satisfy the expectations of both shareholders(for high profits and dividends) and employees(high salaries).In addition,they have their own self-interests,for example in high remuneration and status.

• Customers of the company

• Supplier of the company

• trade Unions

• Government

• Pressure Groups