Stewardship and Governance

Stewardship and Governance
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Introduction
The absence of structures and accountable governance systems have made many
organisations misaligned from its core objectives and riddled with corporate frauds along
with facing dishonesty and scandals. Information technology and globalization have in fact
made corporate world more complex than ever before since organisations became more
powerful and information’s can be relayed faster across the world. However, the recent
developments made on governance theories reveals that the governance systems now
recognises organisational rights not only for its shareholders and the owners, but every single
element that are touched by the actions taken by the companies. In 1195, World Bank defined
“corporate governance as a system by which organizations are controlled and directed” (Zuva
& Zuva, 2018, p. 17). On the other hand, organisational leadership and stewardship approach
have also gained much significance that equally supports governance systems within
organisations so that uniformity in actions are identified that are more based upon moral and
ethical ideologies. Therefore, this paper proposes to identify governance theories that are
relevant to the contemporary organisations and can be used for bringing effectiveness in
them. Alongside, this paper will also identify how stewardship approach of
leaders/management can contribute in bringing effectiveness among profit and in non-profit
organisations. After analysing governance theories and stewardship role, this paper will
analyse leader’s role in bringing good governance in organisation with the help of strong
values and beliefs possessed by them. All the key discussions and definitions will be
supported by credible sources and published articles that includes ethical, moral and biblical
principles.

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Governance theories
According to Harrison & Wicks (2013), “firms that tend to make their stakeholders
better off will be ones that are able to retain their support and participation and thrive over
time” (p. 101). The key notion behind such literature in stakeholder theory is due to the focus
that have been received by organisational stakeholders, especially while they are been treated
and managed well. If their interests remains satisfied and accomplished, it ultimately helps
the firms grow and create value through creation of various principles that are significant for
organisational effectiveness. In todays’ evolving literature, three broad distinctions have been
made on stakeholders’ concept in governance theories that includes descriptive, normative
and instrumental (Shao, 2009). Descriptive stakeholder theory describes particular
organisational behaviour and characteristics that addresses issues like how economic
activities will be structured with the help of other institutions and legal approaches. It also
addresses key questions raised by firm’s leaders like what they must understand of their role
and what shall be practiced that can fulfil organisational requirements as well as
stakeholders’ interests. Instrumental stakeholders concept intends to develop the connectivity
among stakeholder’s management and organisational effectiveness by considering leader’s
performance that can meet organisational goals by adopting stakeholders’ approach.
Normative stakeholders’ theory, on the other hand essentially attempts in providing
guidelines for good governance and describes how organisations must be governed by
undertaking moral and responsible actions.
From biblical perspective, stakeholder’s theory states that unethical behaviour within
organisations might benefit shareholders or the owner’s interest, however they exploit
stakeholders’ values. Therefore, Nwanji & Kerry (n,d ) suggests that to consider stakeholders
interest and moral values in the organisation, leader’s must follow ethical codes that looks
upon the organisation’s decision-making and that they follow corporate principles which

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considers good governance systems. Here, ethical code can be referred to as normative
appraisals in characteristics and individual actions that consists of moral codes and are been
recognised as appropriate for business conduct. Normative appraisals can also be associated
with stakeholder’s intrinsic values and ethical rights which are derived from non-
consequentialist or deontological perspective which can be received by organisational
performance. It this regard, stakeholder’s theory can be said to have some effect of moral
obligations concerning individual rights and duties similar to the virtue ethics theory and
Kant’s theory that reveals human have some intrinsic values and moral rights that must be
realised from organisational performances.
Dierksmeier (2013) identified that among all governance theories, most effective
theory that relates to ethics in corporate field is Kant’s deontology that proves most effective
especially while treating situations that reflects biasness and partial decision-making. This
theory was introduced by a great philosopher and a researcher named Immanuel Kant who
made a study of Greek ethics that reflected moral character and virtue in them. Kant’s theory
is very significant in today’s corporate world also since this theory paves way to
organisation’s management and leaders while conducting decision-making processes for
considering moral principles and ethics for fulfilling organisational objectives in moral way.
According to Jiang & Bowen (2011), deontology theory “emphasizes rationality and moral
reasoning of human beings” (p. 2). Still, the Kant claimed that every human action morality
might not be judged according to end goals or results obtained from the actions undertaken or
else, the possibility of ethical conduct in the action might get destroyed. In one way, it can be
said that Kant’s viewpoints are opposite to utilitarianism theory as this theory focuses more
on enabling moral duties and considers ethics as a ‘yardstick’ (Dierksmeier, 2013). Kant’s
viewpoints are been grounded upon moral perspectives that can be effectively applied into
organisational situations and can considerably bring organisational effectiveness similar to