Leadership and Governance: Assessment 3 Report on Stewardship

This report provides an overview of governance and stewardship, exploring key theories that contribute to organizational effectiveness. It begins with an introduction to governance and its role in decision-making within organizations, followed by a discussion of various governance theories, including agency, stakeholder, resources dependency, and transaction cost theories. The report then delves into the contribution of stewardship theory in both non-profit and profit organizations, emphasizing the role of managers and executives in maximizing shareholder wealth. Furthermore, the report examines the relationship between leader values and beliefs and their impact on effective governance, highlighting the importance of leadership styles in motivating employees and achieving organizational goals. The conclusion summarizes the key findings and emphasizes the importance of selecting appropriate governance and stewardship approaches based on the organization's scope and objectives, ultimately aimed at enhancing shareholder satisfaction and organizational sustainability. The report also includes references to relevant books and journals to support the analysis.

Assessment 3 Governance
and Stewardship paper

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
Key theories of governances that have lead to organisational effectiveness...............................3
Contribution of stewardship theory in effective governance in non profit and profit
organisations................................................................................................................................4
Relationship of leader value and belief to effective governances in organisations.....................5
CONCLUSION................................................................................................................................5

INTRODUCTION
Governance is types of exercising authority within organisation or institute or individual
that has more power and authority to take crucial decision of firm like policy, standard procedure
that needs to be followed by each individual within enterprise. It also explained the way various
decision are been implemented within organisation. This report have discussed about various
theories of governance and stewardship that have contributed in effective organisational
leadership.
Key theories of governances that have lead to organisational effectiveness
There are various decision need to be taken so that enterprise can easily grow and sustain
its business operation in highly competitive market condition. There are various theories of
governance that have been used by both profit and non profit organisation so that overall
objectives of firm can be achieved (Bieling, & Plieninger, (2017). There are numerous theories
of governances which can be illustrated as follows:
Agency theory: This theory illustrated that principle that is shareholders of firm are mainly
responsible for hiring agents like directors that will make all important decision or perform
several task for achievements of goals. Principle expects that directors make all decision that are
beneficial or are in their best interest but it can be possible that agents may take decision that is
not in interest of principle. So, it can be stated that separation of ownership and control are two
main key features of agency theory that is used by most of profitable organisation. Agents in
order to achieves results as per its set priority used both reward and punishments method so that
employees are motivated to give their best for growth of firm.
Stakeholder theory: It is another governance theory which stated that broad range of
stakeholders such as customers, employees, government, local suppliers and investors or
creditors are accountable for management of firm. Top management or senior executives take all
decision on basis of interest of all stakeholders so that company can easily attained competitive
advantages in market. Each stakeholder interest is kept in mind by managements of firm before
taking any crucial decision so that no one can be dissatisfied or unhappy.
Resources dependency theory: There are various resources that are required by firm in order to
complete several task and activities thus delivered best services to end customers. Resources
3

dependency theory mainly focuses on role of board of directors in offering essential resources to
company with linkage with external environments (Harrington, Haggerty, & Scott (2019)).
Directors are mainly responsible for bringing highly skill, information and resources that would
have various individuals to complete task in better manner.
Transaction cost theory: There are large numbers of contract that have been made by company
with itself and market that helps in creating more values so whatever cost that is incurred to
associate with contract is known as transaction cost. Therefore it can be illustrated that company
would undertaken transaction in case cost of transaction is higher.
Contribution of stewardship theory in effective governance in non profit and profit
organisations
Steward theory is related to protecting and maximising wealth of shareholders by
enhancing firm actual performance in market so that they can enjoy more profit margins.
Manager and senior executive are various individuals that are working for benefits of
shareholders as they take all decision which may be fruitful to people that have invested
money in the firm. Profit making organisation by delegating responsibility to employees
to take ownership and accountability to complete task in better manner so that maximum
returned can be enjoyed by shareholders of organisation (Peng and et.al., (2018)).
Stewards that are known as manager and executives make use of both intrinsic and
extrinsic motivation to inspired delivered individual or employees to enhance their
performance and productivity level so that company can earn more profit and shareholder
can get better return on their capital invested. Therefore it can be stated that stewardship
theory have contributed in effective governances as each and every activities of various
employees are being supervised by top management of firm. Manager use various tool
and techniques to measure actual performance with set standard in order to find number
of people that are underperforming within organisation. So, that it can formulate better
strategies and plans to enhance overall performance and production level of employees
for achievements of organisational goals.
Manager and top executive also analysis external environment condition and take
appropriate decision the way it can be used as an opportunity for growth and expansion
of business. They used different motivational theories such as Maslow needs hierarchy,
4

expectancy and management styles in order to manage diverse individual to make
optimum utilisation of their capabilities so that wealth of shareholders can be maximised
or more profit can be given to them (Suver and et.al., (2020)).
Relationship of leader value and belief to effective governances in organisations
Leaders are individual that have influencing or attractive personality that helps in
motivating various employees to perform particular task in specific way so that best
outcome can be gained. Therefore leaders by abiding to ethics, values and belief are able
to inspire other individual to follow its intrusions in order to get success. At the same
time these are peoples that have strong relationship with employees or team member
working in team thus they better understand or know about their taste and preferences.
Leaders by understanding preferences of employees is able to find or identified strategies
that may be more useful in influencing diverse people to put their best efforts so that firm
can earned more profit margin and it can be distributed among interested shareholders
(Saltman & Duran (2016)). It can also be stated that leaders make use of different
leadership styles to command employees or take accurate decision for benefits of
organisation such as autocratic, democratic and laize faire. Therefore leaders through
democratic styles is able to give equal opportunities to all individual to take active
participation in decision making thus helps in enhancing creative’s and innovative skills
and help company in gaining competitive advantages.
CONCLUSION
From the above report it can be concluded that companies as per their scope,
purpose and objectives of operation make use of different governances and Stewardship
theories. Shareholders are people that have invested their excess capital in establishment
and smooth operation of business. So, directors, senior’s executives are responsible to
take decision that can help in enhancing their return and satisfaction level for
sustainability of firm.
5

REFERENCES
Books and Journals
Bieling, C., & Plieninger, T. (2017). 19 Leveraging landscape stewardship: Principles and ways
forward. The science and practice of landscape stewardship, 366.
Harrington, C., Haggerty, K., & Scott, R. E. (2019). Data Stewardship Week in an academic
library: An overview. College & Research Libraries News, 80(4), 206.
Peng, G and et.al., (2018). A conceptual enterprise framework for managing scientific data
stewardship. Data Science Journal, 17.
Saltman, R. B., & Duran, A. (2016). Governance, government, and the search for new provider
models. International journal of health policy and management, 5(1). 33.
Suver, C., and et.al., (2020). Bringing Code to Data: Do Not Forget Governance. Journal of
Medical Internet Research, 22(7). e18087.
6