Definition of stakeholders and their needs
One of the most important things to consider when talking about governance is defining who the stakeholders are and what their activity in the organization is. There can be two types of stakeholders:
- Internal stakeholders
- External stakeholders
The governance team should identify internal stakeholders as corporate directors and employees who are involved in the corporate governance process.
External stakeholders, on the other hand, may include creditors, auditors, customers, suppliers, government agencies, and the public at large.
These stakeholders are influential but not directly involved in the process. The key to stakeholder theory is the realization that all stakeholders are involved in the business in some way, with confidence or anticipation that the business will provide the kind of value anticipated or predicted. Among these benefits may be dividends, wages, bonuses, additional orders, new jobs, tax revenue...