It’s a bit like being all in this together

A stake is pronounced exactly like steak (steɪk) but it means having an interest in a company’s activities and results. Stakeholders are the parties that are affected by the company, affect the company, or both.

What is a stakeholder?

It’s the one that actually cares. Their interest lies in the company’s success. They are the biggest cheerleaders. We say cheerleaders rather than coaches, as stakeholders often don’t have a say in the company’s doings, but they are there to stay and support. A stakeholder is anyone who is invested, one way or another, in the company. That means that employees, investors, customers, suppliers, and even the government and your local community are stakeholders. Stakeholders can be divided into internal stakeholders, which are the ones working directly with the company, and external stakeholders. Just think of a company as a building within a city. The ones living and working inside the building are the internal stakeholders.  The external stakeholders are the other people living in the neighborhood, or an institution such as the city council.

stackholder

Not all stakeholders are equal

Stakeholders are the users of a product, but also their makers, and investors. These don’t always get along, as interests differ. For example, an employee may want more vacation days, while an investor wants to create more profit by making employees work more. A company management has the difficult task of walking in the stakeholders’ shoes, and trying to make sure that they are all satisfied with the way the company works and its results. Stakeholder primacy is when you prioritize a group of stakeholders over another. The CEO of a company is the one who usually makes this decision, and it ranges based on what challenges the company is facing. In the case of a start-up, employees and clients come first as the company’s success depends on them.

Sharing is caring…

A company has business, moral, and ethical duties towards its stakeholders. Transparency is an important part of this, as anyone involved in a company should be able to access relevant information to their role - whether internal or external. Just think of the importance of values for customers today. Many people are trying to be more conscious about their consumption, and be more environmentally friendly. If one is a loyal customer of a company, and therefore a stakeholder, they should be able to know how the company tries to diminish their environmental impact, or how they supply their products.

Why will your future self thank you?

Being a stakeholder means being a part of a collaboration that works towards common goals. Companies are increasingly understanding how important it is to engage stakeholders - whether we talk about employees, clients, or investors. At Bits of Stock™ we value this relationship, and use fractional shares to empower customers, enabling them to engage and become invested in their favorite brands.

Extra bits:

  • The Tontine Coffee House was the first location of the New York Stock Exchange.
  • Historically stocks perform worst during the month of September. Blame it on the summer holidays.
  • 1967: the first time a woman, Muriel Siebert, owned a seat on the NYSE.