Stakeholder Guidelines

What is a stakeholder

In business, a stakeholder is any individual, group, or party that has an interest in an organization and the outcomes of its actions. Common examples of stakeholders include employees, customers, shareholders, suppliers, communities and governments. Different stakeholders have different interests, and we often face tradeoffs when trying to please all of them.

Types of stakeholders

The most common types of stakeholders are the following:- Customers, employees, investors, suppliers/vendors, communities & governments. In the guidelines document we look at the unique needs that each of them typically has. HGT tries to put ourselves in the shoes of each type of stakeholder and see things from their point of view.

Communities

Communities are major stakeholders in large projects. They are impacted by a wide range of things, including job creation, economic development, health, and safety. When a big company enters or exits a small community, they will immediately feel the impact on employment, incomes, and spending in the area. In some industries, there is a potential health impact, as large projects may alter the environment.

Governments

Governments can also be considered a major stakeholder in a project, as they collect taxes from HGT (corporate income), as well as from all the people we employ (payroll taxes) and other spending the we incur (goods and services taxes). Governments benefit from the overall Gross Domestic Product (GDP) that HGT contribute.

Ranking/Prioritizing Stakeholders

Prioritizing stakeholders

It is often a struggle to prioritize stakeholders and their competing interests. Where stakeholders are aligned, the process is easy. However, in many cases, they do not have the same interests at stake. For example, if the project company is pressured by shareholders to cut costs, it may lay off employees or reduce their wages, which presents a difficult tradeoff. Jack Ma, the CEO of Alibaba, has famously said that in his company, they rank stakeholders in the following priority sequence:

  • Customers
  • Employees
  • Investors
  • Many other CEOs also tout shareholder primacy as their number one interest. Much of the prioritization will be based on the stage a company is at. For example, if it’s a startup or an early-stage business, customers and employees are more likely to be first. If it’s a mature publicly traded company, shareholders are likely to be first. At the end of the day, it’s up to a company, the CEO, and the board of directors to determine the appropriate ranking of stakeholders when competing interests arise.

    Stakeholder vs Shareholder

    This is an important distinction to make. A stakeholder is anyone who has any type of stake in a business, while a shareholder is someone who owns shares (stock) in a business and thus has an equity interest.

    Download HGT's stakeholder guidelines document

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