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A stockholder or shareholder is the holder or owner of stock in a corporation.

Other stakeholders in a corporation include the employees, the employees' families, suppliers, customers, community, and others. Some organizations do not have stockholders, but have stakeholders. For example, the state university doesn't have stockholders, but it has many stakeholders: students, the students' families, professors, administrators, employers, state taxpayers, the local community, the state community, society in general, custodians, suppliers, etc.

Shareholders are stakeholders in a corporation, but stakeholders are not always shareholders. A shareholder owns part of a company through stock ownership, while a stakeholder is interested in the performance of a company for reasons other than just stock appreciation. Corporate Social Responsibility The new field of corporate social responsibility (CSR) has encouraged companies to take the interests of all stakeholders into consideration during their decision-making processes instead of making choices based solely upon the interests of shareholders. The general public is one such stakeholder now considered under CSR governance. When a company carries out operations that could increase pollution or take away a green space within a community, for example, the general public is affected. Such decisions may be right for increasing shareholder profits, but stakeholders could be impacted negatively. Therefore, CSR creates a climate for corporations to make choices that protect social welfare, often using methods that reach far beyond legal and regulatory requirements,
The stockholder is provider of capital, the owner, and the profiteer of a corporation. Their role is that of financial investor, in that they lend their current capital with expectations of the return of greater capital in the future. The stakeholder is anyone who has a vested interest in the performance of the company. This includes everyone involved in the successful running of the corporation, such as employees, customers, and the community at large. There is one and only one social responsibility of business- to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition, without deception or fraud." As you can gather from this, the one responsibility management has is to maximize profit in order to satisfy and reward the stockholders, the owners, the investors in the company. The management theory would state that such a goal would be the best manner in which to run the company. High profits turns to high revenue and readily available capital, both of which are key components to a healthy business. The ethical theory would state that it is the most ethical manner in which to run the company, as the company belongs to the stockholders. The stockholders gave their money to the corporation and management has the responsibility to repay this to the best of their abilities. There are other arguments that pertain to the market and economics but we can pass on those. Stakeholder first theories, on the other hand, state that corporate management has obligations not only to stockholders, but to every other group that can stake a claim to the performance of the business. As a management theory, the stakeholder theory held that a business is most successfully run when it considers the well-being of every stakeholder. It accounts for the good-will that is generated by such management practices. As an ethical theory, it rests on the moral sentiment that all people should be treated as ends, not as means to profit. In the end, I would say that the stakeholder theory is the better of the two for both types of theories. However, the stakeholder theory has been used to argue that all stakeholders should be included in decision making processes.

1.Shareholders have financial shares in the company while stakeholders have interest in the company financial or not. 2.Shareholders can be stakeholders, but stakeholders are not shareholders. 3.Shareholders are directly affected by whatever happens to the company while stakeholders are directly or indirectly affected by whatever happens to a company.

4.The stakeholders have a big influence on what will happen to a company while shareholders will only be affected. 5.Shareholders own a part of the company, but not all stakeholders do.

Concept and Objectives


Corporate Governance may be defined as a set of systems, processes and principles which ensure that a company is governed in the best interest of all stakeholders. It is the system by which companies are directed and controlled. It is about promoting corporate fairness, transparency and accountability. In other words, 'good corporate governance' is simply 'good business'. It ensures:

Adequate disclosures and effective decision making to achieve corporate objectives; Transparency in business transactions; Statutory and legal compliances; Protection of shareholder interests; Commitment to values and ethical conduct of business.

In other words, corporate governance is the acceptance by management of the inalienable rights of shareholders as the true owners of the corporation and of their own role as trustees on behalf of the shareholders. It deals with conducting the affairs of a company such that there is fairness to all stakeholders and that its actions benefit the greatest number of stakeholders. In this regard, the management needs to prevent asymmetry of benefits between various sections of shareholders, especially between the ownermanagers and the rest of the shareholders. It is about commitment to values, about ethical business conduct and about making a distinction between personal and corporate funds in the management of a company. Ethical dilemmas arise from conflicting interests of the parties involved. In this regard, managers make decisions based on a set of principles influenced by the values, context and culture of the organization. Ethical leadership is good for business as the organization is seen to conduct its business in line with the expectations of all stakeholders. The aim of "Good Corporate Governance" is to ensure commitment of the board in managing the company in a transparent manner for maximizing long-term value of the company for its shareholders and all other partners. It integrates all the participants involved in a process, which is economic, and at the same time social. The fundamental objective of corporate governance is to enhance shareholders' value and protect the interests of other stakeholders by improving the corporate performance and accountability. Hence it harmonizes the need for a company to strike a balance at all times between the need to enhance shareholders' wealth whilst not in any way being detrimental to the interests of the other stakeholders in the company. Further, its objective is to generate an environment of trust and confidence amongst those having competing and conflicting interests. It is integral to the very existence of a company and strengthens investor's confidence by ensuring company's commitment to higher growth and profits. Broadly, it seeks to achieve the following objectives:

The board adopts transparent procedures and practices and arrives at decisions on the strength of adequate information; The board has an effective machinery to subserve the concerns of stakeholders; The board keeps the shareholders informed of relevant developments impacting the company; The board effectively and regularly monitors the functioning of the management team; The board remains in effective control of the affairs of the company at all times.

Developing appropriate strategies that result in the achievement of stakeholder objectives Attracting, motivating and retaining talent Creating a secure and prosperous operating environment and improving operational

performance Managing and mitigating risk and protecting and enhancing the companys reputation.
The overall endeavour of the board should be to take the organisation forward so as to maximize long term value and shareholders' wealth.