what is the difference between shareholders and stakeholders

Expert Solution

Difference between share holder and stake holder

Basis	Shareholders	Stakeholders
Meaning	These are owners of the company who are interested in company return on investment	These are parties interested in the company's operations and its success.
Primary focus	Main focus on ROI	Main focus on company's performance and goodwill
Scope	These are part of stake holders,narrower in scope	It includes shareholders,so scope is wider
Area	found in companies that issue shares( equity or preference)	found in all types of companies ( pvt or pub)
Effectedby	they are directly affected by the company's financial performance	they may be affected directly or indirectly by the activities of the company
Viewpoint	They want company to undertake activities with positive impact on stock price	They focus on long term longevity apart from financial performance.
Impact	They have direct impact of monetary performance of the company	no such impact
Conflict of interest	they may want the company to focus on improving the financial performance	stakeholders want to incur expenditure that increases that increases value of firm
Example	preferences share holder,equity share holder	suppliers, customers, debentureholders,bank,Govtetc

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Rahul Sunny answered 2 years ago

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