In the last decades of the 20th century, the word "stakeholder" became more commonly used to mean a person or organisation that has a legitimate interest in a corporation, including listed companies, MNCs, SMEs, and NGOs. Under the framework of corporate governance, directors and senior executives are required to consider the needs and expectation of different stakeholders in their decision-making process. In recent years, there have been many new laws and regulation governing the stakeholders’ interest and protection which requires a corporation to devise a system and procedures to ensure legal compliance.

"Stakeholders" include not only shareholders, directors, employees, consumers, suppliers, business partners, competitors, etc. but also members of a community where a corporation may affect the local economy or environment. When considering stakeholder governance and compliance, it poses a great challenge for many corporations on the balance between the “better off” and “worse off” of different stakeholders. Therefore, in order to effectively engage with a community of stakeholders, directors and senior executives needs to be aware of the stakeholders, understand their needs and expectations, understand their attitudes, and be able to prioritise the members of the overall community to focus the organisation’s scarce resources on the most significant stakeholders.

By adopting the approach of "stakeholder governance and compliance", the levels of interest and power of stakeholders can be properly reflected from the corporate governance framework. On top of return on investment by corporations, this approach will bring the all-round winners to different stakeholders. This subject will develop a mindset for students on how to evaluate and analyse the relevant stakeholder governance and compliance issues as the company secretary and governance professional.