Stakeholder in United States

Stakeholder Definition

A third person chosen by two or more persons to keep in deposit property the right or possession of which is contested between them, and to be delivered to the one who shall establish his right to it. [1]

In Business Law

A person, group or organization that has interest or concern in an entity, company or organization.
Stakeholders of the organization can affect or be affected by the entity’s actions, objectives and policies. Some studied examples of key stakeholders are creditors, directors, employees, government (and its agencies), owners (shareholders), suppliers, unions, and the community (local, regional or global, based on the scope of operations of the organization) from which the entity operates or draws its resources.

Not all stakeholders of a company, organization or entity are equal. A company’s customers are entitled to fair trading practices, for example, but they are not entitled to the same consideration as the company’s employees.

When the organization is a publicly traded company, the most common gathering of stakeholders is its board of directors, comprised of high-ranking executives and occasional outsiders who hold large amounts of equity in the company (not always; there are also independent members of the board os directors in many cases). Any one of these stakeholders has the power to disrupt decisions or introduce new ideas to the company. The board of directors has the power to appoint all levels of senior management – including the CEO – and remove them if necessary. Members of the board dictate the future of the company and are involved in all major business decisions.

Notice

This definition of Stakeholder is based on The Cyclopedic Law Dictionary. This entry needs to be proofread.