STAKEHOLDER

MANAGEMENT
Group 1
Rexell Jay Alido
Princes Jea Honrada
Karen Salvador
Sherie Ann Evangelista
 STAKEHOLDER MANAGEMENT
• Stakeholder Management is the process by which you organize, monitor
and improve your relationship with your stakeholders.
7 Principles of Stakeholder Management

• Principle 1: Managers should acknowledge and actively monitor the concerns of all
legitimate stakeholders, and should take their interests appropriately into account in decision-
making and operations.

• Principle 2: Managers should listen to and openly communicate with stakeholders about
their respective concerns and contributions, and about the risks that they assume because of
their involvement with the corporation.

• Principle 3: Managers should adopt processes and modes of behavior that are sensitive to the
concerns and capabilities of each stakeholder constituency.
• Principle 4: Managers should recognize the interdependence of efforts and rewards among
stakeholders, and should attempt to achieve a fair distribution of the benefits and burdens of
corporate activity among them, taking into account their respective risks and vulnerabilities.

• Principle 5: Managers should work cooperatively with other entities, both public and
private, to insure that risks and harms arising from corporate activities are minimized and,
where they cannot be avoided, appropriately compensated.

• Principle 6: Managers should avoid altogether activities that might jeopardize inalienable
human rights (e.g., the right to life) or give rise to risks which, if clearly understood, would be
patently unacceptable to relevant stakeholders.

• Principle 7: Managers should acknowledge the potential conflicts between (a) their own role
as corporate stakeholders, and (b) their legal and moral responsibilities for the interests of all
stakeholders, and should address such conflicts through open communication, appropriate
reporting and incentive systems and, where necessary, third party review.
 United Nation 17 Sustainable Development
Goals (SDGs)
1. No Poverty 12. Responsible Consumption and
2. Zero Hunger Communities 13. Climate Action
3. Good Heath and well-being production 14. Life Below Water
4. Quality Education 15. Life on land
5. Gender Equality 16. Peace Justice and Strong
6. Clean Water and Sanitation. 17. Partnership for the goal
7. Affordable and Clean Energy Institution
8. Decent Work and Economic Growth
9. Industry, Innovation and Infrastructures
10. Reduced Inequalities
11. Sustainable Cities and
5 Pillars of Sustainable Development

PILLARS DESCRIPTION GOAL

1 PEOPLE End poverty in all forms and 1,2,3,4,5
ensure dignity and equality.
2. PLANET Protect our planet’s natural 6,12,13,14,15
resources and climate for
future generations.
3. PROSPERITY Ensure prosperous and 7,8,9,10,11
fulfilling lives in harmony
with nature.
4.PEACE Foster peaceful, just and 16
inclusive society
5. PARTNERSHIP Implement the agenda 17
through a solid global
partnership.
 TRIPLE BOTTOM LINE
The triple bottom line is a business concept that posits firms should commit to
measuring their social and environmental impact—in addition to their financial
performance—rather than solely focusing on generating profit, or the standard
“bottom line.” It can be broken down into “three Ps”: profit, people, and the planet.

• Profit In a capitalist economy, a firm’s success most heavily depends on its

financial performance, or the profit it generates for shareholders.

• People The second component of the triple bottom line highlights a business’s
societal impact, or its commitment to people.

• Planet The final component of the triple bottom line is concerned with making a
positive impact on the planet
SHAREHOLDER VALUE

 Shareholder value is the value delivered to the equity owners of a

corporation due to management's ability to increase sales, earnings,
and free cash flow, which leads to an increase in dividends and
capital gains for the shareholders
 Shareholder value is the value given to stockholders in a company
based on the firm's ability to sustain and grow profits over time.
 CONFLICTING INTEREST OF
STAKEHOLDER

Different stakeholders have different objectives. The interests of different stakeholder groups can conflict.
For example:
 owners generally seek high profits and so may be reluctant to see the business pay high wages to staff
 a business decision to move production overseas may reduce staff costs. It will therefore benefit
owners but work against the interests of existing staff who will lose their jobs. Customers also suffer if
they receive a poorer service
 managers may want to pay for goods later to improve cash flow whereas the suppliers will want their
payment as soon as possible
 managers want the highest profit possible on sales whereas customers want low prices for high quality
goods
 STAKEHOLDER IMPORTANCE

 Impact
Significance of active participation If stakeholders have high impact scores, it
means that their participation is critical to project outcomes.
 Influence
Ability to affect organizational priorities If stakeholders have high influence
scores, it means that their cooperation and political support are necessary for project
success.
 Importance
Product of impact and influence
 STAKEHOLDER THEORY

 In this era of globalization, Corporate Social Responsibility (CSR) has managed

to integrate itself into the corporate culture and has evolved as an integral aspect
of corporate performance reviews. It is a voluntary concept to be adopted by
organizations. It integrates the social and environmental dimensions of a business
in its operational activities. CSR and
 stakeholder theory both highlight the significance of conducting business
operations by taking into consideration the larger societal benefits.
 Three key challenges;

 Aligning business goals with employees' goals

  Firstly, the foremost challenge for organizations is to conduct normal business
operations while making its workforce aware of their responsibilities towards the fulfilment of
the social and environmental concerns.

 Maintaining clear communication about the scope of CSR  

Secondly, due to instances of inadequate communication between an organization
and the community, issues arise which hamper the conduct of the CSR activities in a proper
manner.

 Maintaining transparency in the conduct

 Thirdly, the lack of transparency in matters of disclosure of various initiatives to be
undertaken by the company under its CSR initiatives impacts trust between companies and
their stakeholders.
The stakeholder theory approach to CSR
 
Stakeholder theory is a concept that emphasizes the interrelationship between business and its
various stakeholders, including investors, customers, employees, suppliers, etc as shown in the
figure below.
The interrelationship between stakeholder theory and
CSR

The stakeholders are a critical aspect of the success of CSR initiatives as

seen in Figure 2. Organizations would not be able to achieve their CSR goals
without the participation, expertise, know-how, and loyalty of its various
stakeholders. One important aspect of CSR is that business is accountable to all
its stakeholders who have a valid stakeholders who have a valid interest in it
and the business decisions impact their interests.
STAKEHOLDER
Stakeholders are individuals, groups, or communities that have importance in a
business or company. They can influence or be influenced by the business they run.

TYPES OF STAKEHOLDER
 Internal Stakeholders:
They are a part of the management of the company and have voting powers. They are
the major investors in the company and a part of the board of directors.
 External Stakeholders:
Unlike internal stakeholders, their major role is to invest or disinvest in the
company. They hardly can bring any change in the company’s direction.
Example of Internal and External Stakeholder
 SHAREHOLDER vs STAKEHOLDER: An
Overview

 When it comes to investing in a corporation, there are shareholders and

stakeholders. While they have similar sounding names, their investment in a
company is quite different.
 Shareholders are always stakeholders in a corporation, but stakeholders are not
always shareholders. A shareholder owns part of a public company through shares
of stock, while a stakeholder has an interest in the performance of a company for
reasons other than stock performance or appreciation.
 ROLE OF SHAREHOLDER

 Brainstorming and deciding the powers they will bestow upon the company’s
directors, including appointing and removing them from office.
 Deciding on how much the directors receive for their salary.
 Making decisions on instances the directors have no power over, including
making changes to the company’s constitution.
 Checking and making approvals of the financial statements of the company.
 ROLE OF STAKEHOLDERS

 Direct the Management

 They Bring in Money
 Help in Decision Making
 Corporate Conscience
 Other Responsibilities

Key Differences Between Shareholder and Stakeholders

 A shareholder can sell their stock and buy different stock; they do not have a long term need for the
company. Stakeholders, however, are bound to the company for a longer term and for reasons of greater
need.