A stakeholder once held the money while two people argued over a bet.
The Oxford English Dictionary records the first use of "stakeholder" in 1708, meaning the person who holds the money when a wager is made.1 A "stake" in this sense referred to what was placed at hazard, a usage documented since the 1530s. The stakeholder was a neutral party, someone trusted by both sides of the bet to hold the funds until the outcome was settled.
The word had nothing to do with business for more than two centuries. In 1963, that changed inside the Stanford Research Institute in Menlo Park, California.2
A research team led by Robert Stewart was studying corporate planning practices. Marion Doscher, one of the team members, proposed the term "stakeholders" to describe all the groups without whose support an organization would cease to exist. She considered it an old term meaning those with a legitimate claim on something of value.3 The concept appeared in an internal report titled "The Strategic Plan," dated April 1963, authored by Stewart, Knight Allen, and Doscher.4
The term was a deliberate play on "stockholder" and "shareholder," broadening the circle of people a corporation was supposed to consider. The original SRI definition listed six groups with a stake in corporate decisions, including employees, customers, suppliers, lenders, and the surrounding society.5
R. Edward Freeman published Strategic Management: A Stakeholder Approach in 1984, building on the SRI concept and establishing stakeholder theory as a formal field of study.6 British Prime Minister Tony Blair used the phrase "stakeholder economy" in the mid-1990s, accelerating its spread into political language. By that point, the word had traveled from a gambler's intermediary to a governing concept for corporate responsibility in less than three decades.7