There are generally accepted definitions for 'stakeholder' in
management theory and generally accepted processes for selecting 'stakeholders' in
project management theory. However, there are no commonly accepted definition of 'stakeholder' and no generally recognized process to designate 'stakeholders' in multistakeholder governance. In a democracy, there is only one elemental category for public decision-making, the 'citizen'. Unlike the concept of 'citizen' in democratic governance theory, the concept of 'stakeholder' in multistakeholder governance theory and practice remains unsettled and ambiguous. In multistakeholder governance, there are three tiers of 'stakeholder' definitions: (1) the definition of the 'stakeholder category' (e.g. business); (2) the definition or the specification for selecting organizations or institutions within a 'stakeholder category' (e.g. micro-enterprises or women-owned businesses); and (3) the definition or the specification for selecting an individual person to represent a designated organization or institution within a stakeholder category (e.g. the CEO, the external affairs officer, or a professional staff member). In practice it is common for the founders of a multistakeholder groups to select a key individual to be a member of a multistakeholder group and then retroactively classify that individual and/or the individual's organization into an appropriate definitional category.
Multiple definitions of categories of stakeholders within the UN system At the United Nations
Rio conference in 1992, governments formally accepted nine Major Groups as 'stakeholder' categories. The designated Major Groups were Women, Children and Youth, Indigenous Peoples, Non-Governmental Organizations, Local Authorities, Workers and Trade Unions, Business and Industry, Scientific and Technological Community, and Farmers. Two decades later, the importance of effectively engaging these nine sectors of society was reaffirmed by the
Rio+20 Conference. However that conference added other stakeholders, including local communities, volunteer groups and foundations, migrants and families, as well as older persons and persons with disabilities. Subsequently, governments also added as stakeholders private philanthropic organizations, educational and academic entities and other stakeholders active in areas related to sustainable development. The 'Major Groups' designation is now cited as 'Major Groups and Other Stakeholders'. The
International Labour Organization (ILO)'s governance system functions with just three constituencies: 'workers', 'business', and 'government'. In this tri-partite arrangement, workers and business are on the same footing as governments. The
Committee on World Food Security (CFS) has different main categories: 'Members', 'Participants’ and 'Observers'. The CFS sees itself as "the foremost inclusive international and intergovernmental platform for all stakeholders to work together to ensure food security and nutrition for all". Their 'Participants' category however includes a wide variety of social actors: (a) UN agencies and bodies, (b) civil society and non-governmental organizations and their networks, (c) international agricultural research systems, (d) international and regional financial institutions and (e) representatives of private sector associations and (f) private philanthropic foundations.
Multiple definitions of categories of stakeholders outside the UN system (selected examples) Unlike the multiple definitions inside the UN system, the definition of stakeholder categories for autonomous multistakeholder groups are generally versions of "interest-based" definitions.
International Organization for Standardization (ISO) defines a stakeholder individual or group "as one that has an interest in any decision or activity of an organization" (
ISO 26000). Hemmati, a co-founder of the MSP Institute, a multistakeholder support organization, defines stakeholders as "those who have an interest in a particular decision, either as individuals or representatives of a group. This includes people who influence a decision, or can influence it, as well as those affected by it. The trade association of international environmental and social standard setting bodies, ISEAL, defines stakeholder groups as those "that are likely to have an interest in the standard or that are likely to be affected by its implementation, and provides them with mechanisms for participation that are appropriate and accessible."
Multiple definitions used to select organizations within individual stakeholder categories There is also no consistent definition or selection process to define the individual organization(s) that may "represent" a given category of stakeholders in a given multistakeholder group. For example, the 'government' category can involve government offices at the national, regional, county/provincial and municipal levels, regional inter-government organizations (e.g. European Commission, Organization of American States), intergovernmental secretariats (e.g. FAO, WHO) or include members of parliaments, regulatory bodies, technical experts in specific government departments and courts. The 'civil society' category could similarly involve non-state organizations at the international, regional and national levels, social movements, religious bodies, professional associations, development organizations, humanitarian groups or environmental NGOs. The 'business' stakeholder category could mean multinational corporations, medium-sized national enterprises, small- and micro- local businesses, business trade associations at the international, national, or local level; businesses from developing countries, minority own businesses, women-owned enterprises or green global businesses. When 'academics' are a stakeholder category, the category members could be social scientists, physicists, philosophers, environmental experts, professors of religion, lawyers, university administrators, or a professional association affiliated with scholarly work.
Inclusive vs exclusive multistakeholder initiatives At the G7 summit (Cornwall, UK, 11-13 June 2021) G7 leaders highlighted the importance of
standards in line with their values and affirmed their support for "industry-led, inclusive multi-stakeholder approaches to standards setting". The definition 'inclusive' multi-stakeholder approach called for the use of common
standards encouraging collaboration with
International Organization for Standardization.
ISO standards are
voluntary consensus, therefore inclusive, developed using the core
WTO Technical barriers to trade principles of transparency, openness, impartiality and consensus, effectiveness and relevance, coherence, and addressing the concerns of developing countries. In comparison, the definition 'exclusive' multi-stakeholder approach, where multinational corporations in the
private sector create exclusive multi-stakeholder initiatives, adopting non-consensus
private standards and holding majority voting rights. Not meeting the
WTO principles described above. Exclusive multi-stakeholder initiatives, adopting
private standards are discussed a report from The Institute for Multi-Stakeholder Initiative Integrity (MSI Integrity), another example of an exclusive multi-stakeholder initiative adopting
private standards is the
Global Food Safety Initiative which is designed to define their benchmarking requirements thus controlling the minimum requirements in the schemes they recognize. The difference between
international standards and
private standards is explained by a publication from
ISO.
Selection of representatives Each organization designated to "represent" a stakeholder category can use its own method to select an individual to participate in a stakeholder group. Having an individual from a given organization participate in the leadership of a multistakeholder group does not necessary mean that the sponsoring organization (be it a business, civil society organization or a government) is itself on board. The participation of any given individual may only mean that a particular office or department has chosen to work with that multistakeholder group. The individual involved may have been granted permission to liaise with a given multistakeholder group, provided leave to participate in their personal, professional capacity, or formally designated to represent a specific organization. This ambiguity between commitment of the institution as a whole and the participation of a representative of a specific office or agency can affect a number of different roles inside and outside the multistakeholder group. The multistakeholder group may well appreciate being able to assert publicly that
x governments or
y transnational corporations are part of the multistakeholder group in order to garner greater political-economic recognition. Internally the other participants may believe that the institutional capacities and financial resources of the parent organization may be available to meet the goals of the multistakeholder group.
Uniquely governance issues in the use of the term 'stakeholder' There is no on-going international effort to standardize the core multistakeholder governance concept of 'stakeholder', nor any international efforts to standardize the procedure for designating an organization or an individual within any given stakeholder category. Unlike the use of 'stakeholder' in management theory and project management theory, there are a number of demographic, political, and social factors that can impact the use of the 'stakeholder' concept in governance. Among the identified issues are (a) the difficulty in balancing gender, class, ethnicity, and geographic representation in any given multistakeholder group; (b) the potential conflicts of interests between 'business' stakeholders and their commercial markets; (c) the asymmetric power of different categories of stakeholders and different organizations representing stakeholder categories within a multistakeholder group; and (d) the lack of a review structure or judicial mechanism to appeal the selection of stakeholder categories, stakeholder organizations within a category, or the selection of the person to represent a stakeholder organization. == Types of groups ==