stakeholders

Examples of stakeholders in the following topics:

• Maximizing Value Without Harming Stakeholders

  • The stakeholder concept is associated with the concept of corporate governance.
  • Stakeholders are those who are affected by an organization's activities.
  • The stakeholders can be internal, like owners or employees.
  • Because of the breadth of the term stakeholder, there are different views as to whom should be included in stakeholder considerations.
  • The environment can be seen as a stakeholder.

• Differences Between Required Return and the Cost of Capital

  • The average cost of capital is calculated via combining the overall average required rate on debt stakeholders and equity stakeholders
  • However, things get a bit more complicated when organizations fund new projects via a wide variety of stakeholders.

• Defining Corporate Governance

  • It involves regulatory and market mechanisms; the roles and relationships between a company's management, its board, its shareholders, and other stakeholders; and the goals for which the corporation is governed.
  • In contemporary business corporations, the main external stakeholder groups are shareholders, debtholders, trade creditors, suppliers, customers, and communities affected by the corporation's activities.
  • Internal stakeholders are the board of directors, executives, and other employees .
  • Much of the contemporary interest in corporate governance is concerned with mitigation of the conflicts of interests between stakeholders.
  • Organizations should clarify and make publicly known the roles and responsibilities of board and management to provide stakeholders with a level of accountability.

• Ownership Nature of Stock

  • Stockholders or shareholders are considered by some to be a subset of stakeholders, which may include anyone who has a direct or indirect interest in the business entity.
  • For example, labor, suppliers, customers and the community are typically considered stakeholders because they contribute value and/or are impacted by the corporation.

• Managers, Shareholders, and Bondholders

  • The agency view of the corporation posits that the decision rights (control) of the corporation are entrusted to the manager to act in shareholders' and other stakeholders' interests.
  • Partly as a result of this separation, corporate governance mechanisms include a system of controls intended to help align managers' incentives with those of shareholders and other stakeholders.
  • The deviation from the principal's interest by the agent is called 'agency costs. ' Agency costs mainly arise due to contracting costs and the divergence of control, separation of ownership and control and the different objectives of the managers and other stakeholders.

• Defining Agency Conflicts

  • Partly as a result of this separation, corporate governance mechanisms include a system of controls intended to help align managers' incentives with those of shareholders and other stakeholders.
  • Much of the contemporary interest in corporate governance is concerned with mitigation of the conflicts of interests between stakeholders.
  • In addition to conflicts of interest between managers, shareholders, and bondholders, conflicts of interest can also occur among other stakeholders of a company, such as the board of directors, employees, government, suppliers, and customers.

• Maximizing Shareholder and Market Value

  • Corporate governance involves regulatory and market mechanisms and the roles and relationships between a company's management, its board, its shareholders, other stakeholders, and the goals by which the corporation is governed.
  • The sole concentration on shareholder value has been widely criticized, particularly after the late-2000s financial crisis, where attention has risen to the concern that a management decision can maximize shareholder value while lowering the welfare of other stakeholders.

• Other Comprehensive Income

• Advantages of Private Financing

  • Normally stocks are traded publicly, except in the instance of private stocks, which are only offered and traded by internal stakeholders such as founders, employees, etc.

• Bankruptcy and Bond Value

  • Identify which stakeholders take precedence in receiving cash from a bankrupt business