Difference Between Shareholder and Stakeholder
The subject of this article focuses on “what is the difference between shareholders and stakeholders” Sometimes the simplest questions are frequently asked. I just hope you are aware of these business-related words.
In the meantime, you can relax and read this article soberly to learn the difference between shareholder and stakeholder. It doesn’t matter who you are. Even if you’ve forgotten your basic accounting or economics lessons, it’s not too late to review the difference between shareholders and stakeholders. Let’s move forward.
Definition of Shareholder
He or she is a stock buyer. It is even possible to decipher the meaning of the term from the name itself – i.e. the one who “holds shares”. When you invest your resources, management becomes accountable to you – you can question them on anything that doesn’t seem convincing. You have your money with them, so you are a readable co-owner. It’s as easy as that! Isn’t it? You can even become a member of the decision-making board that runs the operation.
Here’s another rewarding aspect of the operation. Depending on the resources you invest, you will receive periodic profits. However, you can also lose (if you underperform). You can ask Warren Buffet for advice before you get into a bad deal – Buffet is one of the smartest investors in the world. This is far from being an exact science. Isn’t it?
Definition of Stakeholder
This is a person who is very interested in a particular company. The term “stakeholder” has a broader dimension than you can imagine. Why is that? It encompasses a long list of many parties who are related in many ways to the business of the institution. Let’s simply list a few categories of people who may have close ties to the business. These include customers, competitors, governments, suppliers, etc.
Ultimately, shareholders are within the boundaries of stakeholders. At this point, the difference between stakeholders and shareholders should be starting to reveal its beautiful face to you.
Shareholder vs Stakeholder Comparison Table
Here is a table that compares the two terms; it will do all the work of understanding for you.
|Basis of Comparison||Shareholder||Stakeholder|
|Definition||Someone who has rightfully purchased shares||Someone who is extremely enthusiastic in a corporative business|
|Ownership||Literally owns the company||May not be an owner|
|Examples||Main business owners: CEOs, Founders||Clients, governments, NGOs, shareholders, employees|
|Financial Benefits||Directly receives profits/dividends||May not derive direct profit|
|Set||Smaller set (subset)||Bigger set (universal set)|
|Types||Equity or preference shareholders||External & internal|
Conclusion of the Main Difference Between Shareholder vs Stakeholder
In summary, the difference between stakeholders and shareholders is that a stakeholder is anyone who has a vested interest in a company. If you use a Windows OS laptop, you are a stakeholder of Microsoft Inc. If Microsoft closes its doors today, many Windows users will be very concerned.
Without shareholders, you are not a shareholder. In this regard, Bill Gates, Microsoft’s CEO and major contributors are generally the true owners of the company. I hope you are now well aware of these two very misunderstood terminologies.