What is a stakeholder?

A stakeholder is defined as any individual or group that has an interest in the success and performance of a business. This definition encompasses a wide variety of parties beyond just shareholders, including employees, customers, suppliers, investors, community members, and regulators.

Understanding stakeholders as a broad group highlights the importance of considering different perspectives when making business decisions. Companies that acknowledge and engage with their stakeholders tend to build stronger relationships and enhance their overall sustainability and success in the long run. This approach recognizes that the well-being of a business is interconnected with the interests and welfare of multiple entities involved with or affected by the business operations.

The options that narrow the definition to just shareholders, government entities, or suppliers fail to encompass the full range of stakeholders. A successful business strategy must account for the diverse interests of all stakeholders to ensure balanced performance and growth.