Governance and Stewardship: Theories and Contributions in Organizations

GOVERNANCE AND STEWARDSHIP 1
Governance and Stewardship
Student’s Name
Institution Affiliate
Date

GOVERNANCE AND STEWARDSHIP 2
Governance and Stewardship
A steward is typically considered as manager, servant or even a caretaker. Stewardship,
on the other hand, implies the responsible and careful management of anything which has been
entrusted to another individual by another person. The key aspect in stewardship is that such
individuals entrusted with any particular property are only managers or stewards and hence they
are accountable to another person. There are also certain key attributes which explain an act of
being a steward and they include, leading with a particular impact such that it entails having the
right to lead without relying on different entitlements which are usually based on the job titles
and organizational ranks. The stewards are expected to lead with through a mobilization of a
variety of stakeholders on the visions of the future and thus inspire them to work towards their
footsteps.
The other particular attribute of steward involves working towards the greater social good
by developing themselves and the organizations with the aim of embracing certain transcendent
values thus work as a team towards a social good. To effect some of the changes that inspire the
other individuals and benefits, everyone, the steward is tasked with leading their groups, teams,
professions and the organization. Further, the other attribute of a steward is that they protect the
future of the particular organization and this they attain by safeguarding the interests of various
stakeholders in a manner which is accountable and visible. There is also various measure which
takes with the aim of protecting the future of an organization which entails developing a climate
which cares and prudence. As a custodian, the steward is expected to practice caution as he or
she handles various duties within the organization and also apply a certain measured technique
towards a particular risk.

GOVERNANCE AND STEWARDSHIP 3
There are a variety of theories of stewardship explaining effective ways of good
leadership in different organizations that is either profit or non-profit making organizations and
this has been discussed below in the paper.
Theories of Stewardship
Agency Theory
It provides an explanation on some of the best ways which can be applied in organizing
different relationships such that a particular party in an organization is concerned with work as
the other person ascertains the particular work. The relationship entails that an agent is hired by a
principal to work on a particular task which the principal does not have the ability to perform.
The theory assumes that the aspect of self-interest is that which motivates both the agent and
principal and this leads to certain inevitable inherent conflicts (Stout & Blair, 2017).
The agency theory is a result of the differences existing between the executives charged
with the running of any particular organization often referred to as the agents and the shareholder
of the particular firm called the principal. According to the theory, the primary objective of any
particular agent is typically different from that of the principal such that they are often
conflicting. When there is a lesser return on investment by the particular company, the
shareholders tend to suffer an agency loss. Some of the returns which they could have given in
the circumstance that they were the agents are taken over by the particular agents who directly
run the particular companies (Bosse & Phillips, 2016). Further, the theory also stipulates that
there are often certain incentives which are often awarded to the executives with the aim of
maximizing profit for the particular owners of the business enterprise. There is also a board of
directors who are in charge of supervision, monitoring and exercising a strict control on the level
of performance of the particular agents with the intent of ensuring that the different interests of

GOVERNANCE AND STEWARDSHIP 4
the owners are safeguarded. It is therefore clear that most of the managerial decision making
process is typically carried out by the board of directors and hence they are generally
accountable to the owners of the particular company. The above mentioned aspects are generally
for the profit making organizations (Honoré, Munari & de La Potterie, 2015). However, for the
non-profit making organizations, a management technique accrued out on behalf of the owners
of the organizations is used by the board of directors to run the affairs of such an organization
and this often conducted via the lens of the agency theory.
Resource Dependable Theory
According to Northouse (2018), the resource dependable theory is a theory which deals in
an effect of the external resources on an organization’s behavior. It is argued that all the
particular resources required by any particular organization is contained in another organization
and such resources are considered as a basis of power. It is based on the principle that for an
organization to obtain particular resources, they have to work together with other actors in a
particular environment. Generally, the different resources needed by an organization are often
scarce and this leads to differences in accessing more resources, power, and authority (Sturgeon,
2016). It is therefore vital for different organizations to aim at establishing certain strategies
aimed at improving their bargaining position and power different transactions relating to
resources.
Further, it explains, structure, behavior, change, and stability of any particular
organization. A fundamental assumption of the resource dependable theory is that there is often
the aspect of uncertainty clouds and dependencies which have made it difficult for an
organization to have control over its resources (Kibaroglu, Schmandt & Ward, 2017).A key
example occurs when there is an increase in the level of dependencies and other uncertainty