What is the difference between stockholder and stakeholder?
Definition of Stockholder A stockholder or shareholder is the owner of shares of a corporation's common or preferred stock. Definition of Stakeholder A stakeholder is anyone that has an interest or is affected by a corporation or other organization. In other words, a stockholder isn't the only party having a stake in the corporation. Examples of Stakeholders The stakeholders in a corporation include its: stockholders, creditors, employees, families of the employees, suppliers, customers, community, and others. A example of an organization that does not have stockholders is a state university. Even though it does not have stockholders, the university will have the following stakeholders: students, students' families, alumni, professors, administrators, businesses, state taxpayers, the local community, the state community, society in general, custodians, suppliers, etc.
What is a Board of Advisors?
A Board of Advisors is a group composed of business professionals that provides advice on how a business owner can better manage his company. Because of the informal nature of this type of board, it can be structured in a way that the owner deems necessary and most helpful to his company. Advisors typically receive stock-based compensation, such as Options, and benefit from an increased valuation of the business.
What is a Board of Directors?
A board of directors is essentially a panel of people who are elected to represent shareholders. Every public company is legally required to install a board of directors; nonprofit organizations and many private companies – while not required to – also name a board of directors.
Board of Advisors vs. Board of Directors
Though both a Board of Advisors and the Board of Directors deal with how a company or business is run, there are a lot of differences between the two, as listed below: While the Board of Advisors is informally formed, the Board of Directors, on the other hand, is composed of individuals who have been instated by means of an election, which makes them liable to the organization. They are bound by law, as they represent the company and its stockholders, creating policies and resolving issues related to the business operations. The job of the Board of Directors is more difficult, and its responsibilities are greater than those of a Board of Advisors. The Board of Directors is more careful with the advice they give because of their financial responsibility to stockholders. While the Board of Advisors is selected personally by the owner of the company and doesn’t have any voting rights, the Board of Directors is directly involved in decision- making. While the advice of the Board of Advisors may or may not be followed by the owner or CEO, the Board of Directors is more powerful. It is powerful enough to mandate changes in the organization and steer the company toward a particular direction. A Board of Advisors is composed of individuals who are selected for their specific fields of expertise. The Board of Directors may need the input of certain specialists or industry experts in order to help them better understand the situation at hand. While a Board of Advisors receives very minimal compensation, the Board of Directors gets really high pay. The former may only get a free meal during meetings. The Board of Directors, on the other hand, receives allowances such as travel allowance and a fee for attending board meetings.
Check out Apple’s organization chart https://theorg.com/org/apple/org-chart
2. Find 2 examples of stockholders, 2 examples of stakeholders, and the organization
chart of any of your preferred companies. You only need to choose ONE company.