Stakeholders and risk Management

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Business Finance

Question Description

Sometimes, there may be competing interest among the stakeholders you mention, most notable between the interests of the shareholders (who actually own the company and are the investors) and the employees.  What are some of the possible conflicts and how might they impact risk management goals?

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Explanation & Answer

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It is important for a business to balance the interest of its various stakeholders. Different stakeholder groups have different priorities, for example: 

  • Shareholders expect the business to make a profit and receive a return on their investment.
  • Employees require good working conditions if they are to be retained. 
  • Investors may want to see evidence of how a company responds to environmental issues before committing money to the business.
Because of the agency problem , not easy to achieve the risk management goals.

Please let me know if you need any clarification. I'm always happy to answer your questions.

Enovnannm A (570)
Duke University

Really useful study material!

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