The Ramifications of Being Jus’ a ‘Stakeholder’

As a writer, I’m constantly at odds with how certain words are misused in the media, by politicians, organizations and individuals. One of those words that give me pause each time I hear it is ‘stakeholder.’

Recently I read a posting from a friend and sheriff: “I attended a meeting where the stakeholders from Southern Oregon and Northern California met and discussed the upcoming Marijuana growing season.”

In this case he was trying to say, ‘other law enforcement officials,’ instead of ‘stakeholders.’

Over and over I hear or see the word being used by people who, I’m certain have no idea what it means. In fact, the term has made a rebounding resurgence in the last six or seven years and this leaves me even more concerned.

A stakeholder is a person that has an interest in an enterprise or project. The primary stakeholders in a typical corporation are its investors, employees, customers and suppliers. However, modern theory goes beyond this conventional notion to embrace additional stakeholders such as the community, government and trade associations.

A common problem that arises with having many stakeholders in any enterprise is that their various self-interests may not all be aligned. In fact, they may be in conflict with each other.

The primary goal of a corporate enterprise from the viewpoint of its shareholders is to maximize profits and enhance shareholder value. Since labor costs are a critical input cost for most companies, an enterprise may seek to keep these costs under tight control.

This may have the effect of making another important group — stakeholders, or rather its employees, unhappy. The most efficient companies’ successfully manage the self-interests and expectations of its stakeholders.

The term “stakeholder”, as traditionally used in the English language in law and notably gambling, is a third-party who temporarily holds money or property while its owner is still being determined.

More recently though a very different meaning of the term is being widely used. In a business context, a “stakeholder” is a person or organization that has a legitimate interest in a project or entity.

A stakeholder was originally a person who temporarily holds money or other property while its owner is being determined. This is, for example, the situation when two persons bet on the outcome of a future event and ask a third, disinterested, neutral person to hold the money or “stakes” that they have wagered or “staked”.

After the event occurs, the stakeholder distributes the stakes to one or both of the original (or other) parties according to the outcome of the event and according to the previously decided conditions. Courts sometimes act as stakeholders, holding property while litigation between the possible owners resolves the issue in which one is entitled to the property.

Trustees also often act as stakeholders, holding property until beneficiaries come of age. An “escrow agent” is another kind of trustee who is a stakeholder, usually in a situation where part of the purchase price of property is being held until some condition is satisfied. In legal documents, the escrow agent is often referred to as a “mere stakeholder.”

The new use of the term arose together from the spread of corporate social responsibility ideals, but there are also dystopian views being served by the new meaning of the term. Now ‘stakeholder’ means putting a ‘stake through private property rights,’ by creating organizations like the United Nations, able to tell you what you can and cannot do with your property.

This is part of a Cold War technique, known as a Delphi, used to channel people into accepting a point of view that is imposed on them, while convincing them that it was their idea in the first place. In essence, a Delphi is used in places where the organizers want to the appearance that they have listened to community opinion and incorporated it into their plan.

It’s time to turn away from words like ‘stakeholder,’ and return to terminology like ‘owner,’ ‘employee,’ ‘parent,’ or ‘law enforcement officials.’ If we don’t, this nation will continue to tumble further into the abyss of its’ civil ignorance.