Questions and Answers
All shareholders are stakeholders.
True
Who is a person or organization that owns shares of a for-profit corporation?
Shareholders (stockholders)
What do shareholders share and what influence do they have?
Share the profits and may be able to vote for board members and be involved in other decisions.
What term describes much broader groups with a legitimate interest in an organization?
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Who can influence an organization or be affected by it?
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Study Notes
Shareholders vs. Stakeholders
- All shareholders are considered stakeholders in an organization, but not all stakeholders are shareholders.
Shareholders
- Individuals or entities that own shares of a for-profit corporation by holding stock.
- Holders of stock have a financial interest in the company's performance.
- Shareholders may receive dividends from profits and have voting rights in key corporate decisions, such as electing board members.
Stakeholders
- A broader category encompassing anyone with a legitimate interest or stake in an organization.
- Stakeholders may include employees, customers, suppliers, investors, and the community at large.
- Stakeholders can influence the organization or be affected by its decisions and actions.
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Description
Explore the key concepts surrounding shareholders and stakeholders with these flashcards. Understand the definitions, distinctions, and roles of each in the corporate structure. Perfect for students and professionals looking to enhance their understanding of corporate governance.
