Legal Definitions - alternative constituency

An alternative constituency, also known as a nonshareholder constituency, refers to a group of individuals who are not shareholders of a corporation but have a vested interest in the company's operations. This interest may be considered by the corporation when making major policy decisions, in addition to the interests of shareholders.

Examples of alternative constituencies include:

• Employees
• Customers
• Suppliers
• Local communities

For instance, a corporation may take into account the impact of its decisions on the local community, such as the environmental impact of its operations, even if it does not directly affect the shareholders. Similarly, a company may consider the well-being of its employees when making decisions about layoffs or restructuring.

Overall, alternative constituencies represent a broader range of stakeholders who may be affected by a corporation's actions, beyond just its shareholders.