Stakeholders’ interest in an organisation determines the category to which they can be classified. They can be classified into two categories. That is, active and passive stakeholders. Where an interest holder is not taking an active role in their interest in the organisation, he/she is a passive stakeholder. This article explains in detail.
Active stakeholders explained
An active stakeholder is the individual who is involved in the activities and decision-making of an organisation especially in an area of interest. These individuals, groups, or institutions engaged in the area of interest hands-on and in strategic areas.
Passive stakeholders explained
Passive stakeholders are not actively engaged in the area of interest. They observe progressions of the entity in those areas but never engage with the company to ensure that their interests are provided for promptly.
Differences between active and passive stakeholders
Participation: Active stakeholders participate and engage in their area of interest in the company. Passive stakeholders do not engage in their area of interest.
Read: Moving from shareholder primacy to stakeholder pluralism
Decision-making: Active interest holders are engaged in the strategic decision-making of the entity. An active stakeholder may provide the policy guideline used to protect their interest. Whereas, passive stakeholders are not contacted in decision-making.
Observation: The active stakeholder observes and takes action in the area of interest in an organisation. But the passive one only observes them. They monitor progressions, that is, if the company is taking action and solving the issues raised.
Types: Internal and external stakeholders are active. However, most external stakeholders are passively involved in their area of interest.
Examples of active and passive stakeholders
An example of active stakeholders is the Central Bank of Nigeria. They have an interest in the Nigerian Financial System. Banks and other financial institutions operate in the financial market. To ensure stability, the apex bank provides regulations and policies to banks. By doing so, the CBN is actively participating in the banking industry.
For passive stakeholders, an example is an ESG analyst. This individual is not actively involved in protecting the environment. But they observe and analyse what companies are doing in sustainable environments and disclosures.