What Are Stakeholders?

By Catherine Brock – Updated Oct 18, 2025 at 2:45 PM

Key Points

Investing in companies considering all stakeholders may lead to sustainable profits.
Salesforce annual reports highlight their broad stakeholder accountability.
Understanding stakeholder priorities helps predict company decision-making.

In some circles, the person holding a stake is likely a vampire hunter. But in the world of investing, the answer to our title question is more mundane. Stakeholders are the people and groups that affect or are affected by a company's actions.

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a graphic that demonstrates internal and external stakeholders as well as examples. — Image source: The Motley Fool

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Capitalism

Capitalism is an economic system in which individuals and private parties control the means of production and profits are the key driver of economic activity.

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You can agree or disagree with that argument -- and deploy your money accordingly. Listen to earnings calls and read annual reports to understand a company's approach to stakeholder conflicts. Then decide whether their approach aligns with your own values.

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About the Author

Catherine grew up in Southern California wearing a lot of black and trying to perfect the art of sarcasm. Prior to joining The Fool as a contract writer, Catherine was climbing the corporate ladder in marketing roles and dabbling in too many side hustles. When she's not writing, she can be found riding a horse in the country or shopping online for clothes.

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@catherinejbrock

Catherine Brock has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Salesforce. The Motley Fool has a disclosure policy.

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Employees vs. shareholders: An organization can show higher profits for shareholders by minimizing the investment in its workforce. This can take many forms, from salary reductions to a below-market compensation structure. It can get even darker, too. A 2021 report by The New York Times alleged Amazon (AMZN +0.21%) was routinely paying employees less than they'd earned.
Customers vs. shareholders: Customers want a high-quality product, but quality can be expensive, and expenses cut into shareholder profits. In the 1970s, Ford Motor (F +1.13%) chose not to repair a faulty gas tank in its Pinto model after crash tests revealed a safety risk. Why? Because a cost-benefit analysis concluded that settling customer lawsuits would be less expensive than fixing the Pinto. Dozens of people died or were injured by the Pinto's exploding gas tank .
Customers vs. employees: On a more granular level, frontline employees face the potential for conflict with customers every day. A petty disagreement can sometimes spiral into violence. When that happens, the company must pick a side, and the wrong choice could easily damage employee satisfaction and productivity. In 2019, a brawl between an employee and a customer broke out in a McDonald's (MCD -1.19%) restaurant in Florida. The customer was escorted out and arrested on battery charges. McDonald's subsequently said in a statement that it was cooperating with the police investigation, adding, "Our highest priority is always the safety and well-being of our employees and customers at our restaurants." The statement referenced both stakeholder groups, but employees were noted first.

Stakeholders and corporate decision-making

Understanding how a company prioritizes its stakeholders tells you a lot about how the leadership team makes decisions. If shareholders are the priority without exception, then the business may be pursuing profits at all costs. Employees, customers, and local communities could suffer as a result.

Thankfully, corporate decision-making isn't often that black and white. A company can pursue profits while:

Taking care of its employees
Producing safe, value-rich products
Providing decent margins to its suppliers
Protecting the environment
Contributing positively to society at large

Some argue that this balanced approach to stakeholder needs ultimately serves the shareholder better because it's a more sustainable way of doing business. That should translate to improved shareholder returns over the long term. This is the idea behind stakeholder capitalism, a fundamental concept in ESG investing.

What Are Stakeholders?