Definition of terms: Stakeholder
The term “stakeholder” originally comes from English and literally means a person or group with a “stake” in a company, project, or organization. In a legal context, the definition of stakeholders includes all natural and legal persons, institutions, or groups who have an actual or potential interest in the activities, decisions, and developments of an organization, or are affected by them. The stakeholder concept is incorporated into legal contexts in particular in corporate law, supervisory law, contract law, and corporate liability law.
Legal basis and distinctions in terminology
Stakeholders in corporate law
In corporate law, the term stakeholder stands in contrast to shareholder, who is directly associated with ownership and voting rights in a company. Stakeholders, however, include a much broader group, encompassing not only shareholders but also employees, creditors, suppliers, customers, business partners, authorities, environmental organizations, and the general public.
Although stakeholders do not necessarily have membership rights under corporate law, various legal provisions—such as the German Stock Corporation Act (AktG), the German Limited Liability Companies Act (GmbHG), or European Union law—result in an indirect participation or consideration of their interests.
Stakeholder duties in the German Stock Corporation Act
The German Stock Corporation Act requires the management board and supervisory board of a stock corporation not only to safeguard the interests of the shareholders in the management of the company but also to consider other relevant interest groups (the so-called stakeholder approach, see § 93 AktG). Although the law does not explicitly refer to “stakeholders,” case law and legal literature expressly cover various groups of claimants.
Stakeholders in European legal acts
Numerous EU directives, particularly in the areas of corporate governance and sustainability (e.g., CSR Directive, EU Taxonomy Regulation), explicitly address the identification, assessment, and consideration of the interests of all stakeholders. Companies are required to conduct comprehensive stakeholder dialogues, disclose risks that affect stakeholder interests, and, if necessary, make adjustments in their corporate practices.
Stakeholders in the BGB and liability law
The German Civil Code (BGB) does not contain direct definitions of stakeholders. However, in the context of duties of care (§§ 241, 823 BGB), duties to inform, and duties of protection, indirect rights in favor of stakeholders arise, for example as contracting parties, third-party beneficiaries of duties of protection (so-called third-party effect), or under tortious liability provisions.
Stakeholder groups in the legal context
Shareholders and partners
Shareholders are always among the stakeholders and have original corporate co-determination and influence rights (e.g., voting rights, dividend claims).
Employees and works council
Employees and their representative bodies (e.g., works council under the Works Constitution Act) have statutory participation, hearing, and information rights (§§ 80 et seq. BetrVG), making them, in the broad sense, stakeholders with explicit legal positions.
Creditors and contracting parties
External capital providers, suppliers, and other contracting parties are stakeholders because corporate decisions affect their business relations and investments. Their rights and obligations arise primarily from the contractual foundations and insolvency protection mechanisms.
Customers and the public
Consumer and data protection laws (e.g., BDSG, GDPR) reflect the legal status of customers as stakeholders. The public acts as an external stakeholder on companies—for example, through class actions or environmental information rights.
Government and environmental organizations
Regulatory and approval procedures by authorities, environmental requirements (such as the Federal Immission Control Act, Environmental Information Act), and regulations on sustainability reporting address the interests of public authorities and societal groups as stakeholders.
Rights and obligations of stakeholders
Rights to information
Stakeholder groups have different entitlements to information. Companies are obliged to inform shareholders and, in some cases, the public about material developments (e.g., under § 121 AktG), while employees can exercise information rights under the Works Constitution Act.
Participation rights and co-determination obligations
Employee representatives have co-determination rights in certain cases (Co-Determination Act, One-Third Participation Act). Shareholders possess extensive influence and voting rights. Creditor protection rights in insolvency proceedings (e.g., creditors’ meetings, § 74 InsO) should also be mentioned.
Litigation and complaint rights
Stakeholders may assert their interests by means of various legal actions, for example by individual legal action (e.g., shareholder lawsuit), class action (e.g., environmental or consumer protection associations), or complaint proceedings against supervisory authorities.
Duties of care for corporate bodies
Governing bodies of companies have a duty to adhere to statutory standards of care. Violations that impair stakeholder interests may lead to claims for damages (e.g., under § 93 para. 2 AktG or § 826 BGB).
Stakeholder management and legal requirements
Involvement and communication
Companies are increasingly required to conduct systematic stakeholder analyses and dialogues, for example under supply chain laws, sustainability obligations, or in corporate reporting (cf. Corporate Social Responsibility, CSRD).
Risk and compliance management
The legal consideration of stakeholder interests is an integral part of commercial risk management and compliance. Failure to consider stakeholder interests can result in liability risks, reputational damage, and fines.
Differences from the shareholder approach
The classic shareholder approach focuses exclusively on the rights and interests of a company’s shareholders. In contrast, the stakeholder approach requires comprehensive consideration of all socially relevant groups, which increases both the scope and diversity of legal obligations and liability risks.
Significance of stakeholders in case law and practice
Case law increasingly takes stakeholder interests into account in its decisions, for example in evaluating business decisions, resolving corporate disputes, or enforcing environmental or consumer protection requirements. The importance of the term stakeholder continues to grow, particularly through the increased integration of social, environmental, and ethical aspects in corporate governance.
Literature and further sources
- Baums, Th.: Stakeholder and Shareholder Model in Corporate Law
- Lutter, M.: Rights of Stakeholders in the European Union
- Wielandt, F.: Corporate Governance Between Shareholder Value and Stakeholder Value
Note: This article provides a detailed overview of the legal aspects of stakeholders in Germany and the European Union. For application to specific circumstances, the relevant statutes, directives, and court decisions must be consulted.
Frequently asked questions
Who is considered a stakeholder of a company in the legal sense?
In legal terms, the group of stakeholders of a company mainly includes those groups and individuals who, due to statutory or contractual provisions, have certain rights, duties, or claims against the company. These typically include the partners or shareholders, whose rights and obligations are governed by the respective agreements or articles of association as well as the Stock Corporation Act, the Limited Liability Companies Act, or other relevant regulations. In addition, employees—whose status is particularly protected under labor law and collective agreements—and creditors, who have contractual claims arising from credit, supply, or other debt relationships, are included. Customers, suppliers, and the state (e.g., as a tax creditor) are also considered stakeholders, as there are often statutory or contractual relationships between them and the company. Particular attention should also be paid to public law stakeholders such as regulatory authorities, competition authorities, and other institutions, whose influence and supervisory rights are stipulated by law.
What legal obligations does a company have towards its stakeholders?
A company’s legal obligations towards stakeholders arise from various laws, regulations, and contracts depending on the stakeholder group. Towards the partners and shareholders, there are duties of information, profit distribution, and participation, the extent of which is defined by corporate law provisions. Labor law regulations govern the company’s duties towards its employees, particularly regarding wage payment, occupational safety, and participation rights. Contractual obligations to creditors include timely repayment of capital and compliance with agreed conditions. In relation to the state, the company is obliged to comply with tax, social security, and other public law regulations. There are also statutory duties of information, care, and liability towards customers, for example under the German Civil Code (BGB) or product liability laws.
Do stakeholders have special rights regarding company co-determination?
Yes, in particular, employees have extensive co-determination rights under German law, which are defined in the Works Constitution Act (BetrVG), the Co-Determination Act (MitbestG), and other specialized laws. These rights of participation exist at various levels: On the one hand, through the works council at the operational level, which participates in hiring, dismissals, and social plans, and on the other hand at the company level through co-determination in the supervisory board, especially in larger corporations. Certain creditors can also acquire participation rights through restructuring proceedings or insolvency law, for example in creditor meetings. Shareholders, by law, have the right to attend general meetings, vote, and request information.
What is the significance of the stakeholder principle in legal corporate governance?
The stakeholder principle is not expressly prescribed as a guiding maxim under German law, yet the interests of various stakeholder groups are incorporated into corporate governance through specific statutes. Although the duties of the management board and directors are primarily aimed at the company’s welfare and shareholder interests (shareholder value approach), § 93 para. 1 AktG, for example, requires the “diligence of a prudent and conscientious manager,” thereby requiring consideration of other stakeholders such as employees, creditors, and the public. In insolvency law, for example, creditor interests are particularly protected, and in labor law, employee rights are often accorded equal status alongside the interests of the owners. Legal requirements for sustainability reporting and corporate social responsibility also, in fact, involve further stakeholder groups.
How are conflicts of interest between different stakeholders regulated by law?
Conflicts of interest between stakeholder groups are addressed in German law by a comprehensive system of norms, regulations, and internal company rules. For example, in insolvency proceedings, creditor interests are particularly considered by the Insolvency Code (InsO), and employees’ rights are protected by strict requirements for social plans and restrictions on dismissals. Corporate law provisions such as the Stock Corporation Act regulate typical conflicts between majority and minority shareholders, for example through regulations concerning general meeting rights and minority protection. In labor law, the Works Constitution Act and collective bargaining law ensure that employee interests are taken into account in corporate decisions. Ultimately, it is often the responsibility of management, within the framework of legal requirements, to achieve an appropriate balance of the sometimes divergent interests.
What liability risks do company managers face in dealing with stakeholder interests?
Company managers (management boards, managing directors) in Germany are liable both internally (to the company) and externally (to third parties) if they breach their duties towards stakeholders. Under § 93 AktG and § 43 GmbHG, they are subject to duties of care and loyalty. Breaches can result in claims for damages, for example if employee rights are disregarded (e.g., in mass layoffs without a social plan), creditor interests are ignored (e.g., by delaying an insolvency filing contrary to § 15a InsO), or information duties towards shareholders are violated. Criminal consequences are also possible, such as for embezzlement, fraud, or violations of labor or environmental law. In the field of product liability, culpable conduct can lead to far-reaching personal liability consequences.
What information rights do stakeholders have in relation to the company?
The right to information is structured differently for various stakeholder groups. Shareholders have a statutory right to information and inspection at general meetings (§ 131 AktG). Employees are represented by the works council, which has extensive rights to information and consultation under the Works Constitution Act. Creditors usually only have those information rights stipulated in their individual contracts, but may obtain insight into certain company matters through the insolvency administrator during insolvency proceedings. The state and public authorities have extensive rights of examination and information, based on tax, labor, and supervisory law regulations. Customers are entitled to product- and contract-specific information, especially under consumer law and the Product Liability Act. Important disclosure requirements also include publication of annual financial statements in the Federal Gazette under §§ 325 et seq. HGB.
