I believe in the broadest definition of “stakeholder” because of the sheer dynamism of the subject in corporate governance.

The stakeholder theory of corporate governance proposes that for an organisation to be successful, it must consider the interests of it’s stakeholders. Employees, lenders, suppliers, regulators, government, community, board of directors and shareholders are part of internal and external stakeholders in an organisation.

While shareholders are the most important stakeholders (especially in profit making enterprises) when it comes to the performance and health results of an organisation, it is important to recognise that whereas the other stakeholders may not be looking for a return on an investment (because they didn’t make any), their interests if not considered may affect the performance and even the existence of the organisation. For example, failure to adhere to industry and environmental management regulations and defaulting on loan repayments may result in heavy fines and other penalties that may adversely affect the performance of the organisation. Therefore, the need to manage stakeholder relationships and balance their needs is an art worth perfecting.

As I have said in several fora, we should not overlook the fact that the organisation itself is an entity that has interests that must be promoted by actors who discharge their functions in its best interest. Delicately meshed together, stakeholder relations, engagement and management is an interesting space of practice!

To the various stakeholders.. come on into my house of thoughts… there is space for all of us!