Stakeholder

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Stakeholder

Stakeholders are those people and organisations that are affected by something – for instance a policy, programme, action or organisation – literally, those who have a stake in it.

The stakeholders in an enterprise might include, depending on the particular case:

  • employees and their families and dependents
  • customers & suppliers
  • financial stakeholders such as investors (shareholders), banks, grant-making trusts, public programmes
  • landlords & tenants
  • the local community
  • the environment (e.g. in terms of energy use and pollution) – as a proxy for humankind
  • the state, as recipient of tax revenue and provider of social security payments

A public policy might have the following stakeholders:

  • primary stakeholders – the intended beneficiaries, their families and dependents
  • secondary stakeholders – indirect beneficiaries such as representative organisations
  • implementing agencies
  • supervisory authorities
  • taxpayers
  • government (in terms of its popularity and thus likelihood of re-election)
  • beneficiaries of other policies on which there are knock-on effects

Stakeholders vs. shareholders

The concept of ‘stakeholder’ is not the same as that of ‘shareholder’, which is restricted to the owners of the financial instruments called shares, or stock, in an enterprise. There are various types of shares. Equity shares entitle their holders to a vote in major decisions and a share in the assets, profits and losses of a business. Preference shares normally have no vote but bear a fixed rate of return. Both these types of shares may normally be traded, and their value will fluctuate with the company’s fortunes. Co-operative shares on the other hand usually have a fixed value and carry an entitlement to an annual interest payment, which reflects the business’s commercial success.

It should also be noted that a subsidiary – and to some extent contradictory – meaning of ‘stakeholder’ is a trusted neutral person who looks after the stakes placed on a bet until the winner is decided.

Stakeholder analysis

When analysing policy, it is good practice to carry out a stakeholder analysis to determine who is affected, and to what extent. For instance a stakeholder analysis is the first step in an SROI analysis.

For any one policy issue, the potential range of stakeholders is vast. For multi-dimensional policy issues such as inclusive and social entreprise, the range is even greater. Not all potential stakeholders will be relevant actors for all issues, or at all levels of policy-making and phases of the policy cycle. A distinction is sometimes made between:

  • primary stakeholders – those ultimately affected by the policy, most importantly disadvantaged potential entrepreneurs
  • secondary stakeholders – the intermediaries in the policy process, such as service providers, advocacy organisations and monitoring bodies

As far as inclusive and social enterprise policy is concerned, a very large range of institutions and individuals are potential secondary stakeholders. Thus, judgements as to the importance of stakeholder groups, and of their influence on the policy process, need to be made when deciding on the stakeholders to be involved, in which issue and at which phase and level. One important aspect of this question is the extent to which stakeholder groups are able to represent and articulate, the needs and interests of beneficiaries, including women and men and special needs groups. Another aspect is the extent to which stakeholders contribute resources – human, financial, technical – essential for policy success.

There may be said to be five main categories of stakeholders in inclusive and social enterprise policy:

  • policy-makers
  • social partners
  • civil society
  • experts
  • the general public

Naturally, the full range of types of stakeholders is considerably more varied than this five-fold categorisation might suggest. Each of the broad categories can be divided into sub-categories. Furthermore, some stakeholders (even important ones such as potential entrepreneurs and service providers) may be represented in more than one main category, depending on such aspects as the extent of their institutional organisation. Variation is also notable from one issue to another as well as from one country to another depending on national institutional arrangements (e.g. public service, civil society, private sector).

Types of stakeholders

Within each policy level (European to local) different types of stakeholders are involved in inclusive and social enterprise policies, as the following examples show:

  • Government departments and agencies: responsible for policy-making and overall implementation. Individual actors range from government ministers to local mayors;
  • Civil servants / administration: persons within the administration (e.g. top managers of ministries) responsible for preparing the laws, programmes and actions in the relevant fields. As such they are important actors in the policy-making process. This also comprises civil servants in ministries or institutions responsible for collecting information and data to monitor, report on and evaluate policies;
  • Parliaments: as democratically elected assemblies they are part of the decision-making process. In most cases, they also control the budget and therefore play an important role in policy orientation;
  • Social partners: in certain countries they are part of the decision-making process or have at least an advisory role, as in the European Economic and Social Committee;
  • Civil society: representatives of non-governmental organisations working in the field of inclusive & social entrepreneurship. They may be advocates for disadvantaged potential entrepreneurs (e.g. ENSIE), or service providers (e.g. Verbund Enterprise);
  • Experts: relevant networks and experts in the field of inclusive & social entrepreneurship;
  • The media;
  • The general public, including potential entrepreneurs, particularly those who are disadvantaged.