Stewardship Theory Theories

Corporate governance is a set of actions used to handle the relationship between stakeholders by determining and controlling the strategic direction and performance of the organization. Corporate governance major concern is making sure that the strategic decisions are effective and that it paves the way towards strategic competitiveness. (Hitt, Ireland, Hoskisson, 2017, p. 310). In today’s corporation, the primary objective of corporate governance is to align top-level manager’s and stakeholders interest. That is why corporate governance is involved when there is a conflict of interest between with the owners, managers, and members of the board of directors (Hitt, Ireland, Hoskisson, 2017, p. 310-311).

Corporate governance in itself has no single definition but common principles which it should follow. For example in 1994 the most agreed term for corporate governance was “the process of supervision and control intended to ensure that the company’s management acts in accordance with the interest of shareholders” (Parkinson, 1994)1. Corporate governance code is not a direct set of rules but a self-regulated framework which businesses choose to follow. This code has continued to change in the past 20 years in accordance with what is happening in the business world. For example the Enron scandal caused reform in corporate governance with the Higgs Report which corrected the issues which were necessary. Although it does not quickly fix problems, it gives a better framework to

Farrar, J. (2008). Corporate Governance: theories, principles and practice. 2nd ed. South Melbourne, Vic: Oxford University Press

The article is written to help readers gain a solid understanding the roles of corporate governance, both inside and outside the company. Its goal is simply to impart information, not make claims or arguments on its own. I will be judging it mainly on the sources gathered, numerous examples and explanations given and the overall effectiveness it possesses in effectively communicating its ideas.

Governance is usually delivered through an agreed constitution, through a complex web of customs and practices, underpinned by a shared system of ethics, to a range of stakeholders from the shareholder to the customer in that institution. Styles of governance vary depending on the nature and size of the body concerned. At one extreme is the rule-based style adopted by public sector bodies, which may be concerned with conformity rather than performance. At the other extreme are the churches and clubs where governance is based on trust. Most corporate bodies have an amalgam of both trust and rules in appropriate proportions. The Logic being that trust can only work with open governance.

The concept of stewardship is an ongoing part of nursing. As defined by Merriam-Webster dictionary, stewardship is “the activity or job of protecting and being responsible for something.” In this case that something corresponds to the nursing field as a whole. The concept of stewardship is not thought of as often as it should be. Sometimes stewardship can be confused with religious meanings or often is simply not a topic that is heavily weighted. However stewardship is indeed an intricate concept that is vital for the overall success of nursing. I believe stewardship in nursing is the ability to improve, enhance, and oversee the prosperity of how nursing as a whole functions. Stewardship entails many areas of concern such as safety, increased autonomy from other health care professions, accreditation, economics, and most importantly the overall needs of the patient. As nursing’s future continues to change, stewardship is vital in developing life-long learning practices and ultimately shaping current and future leaders. In order for standards of practice to support the future, nurse leaders demonstrating stewardship must be able to collaborate to form innovative models of care delivery in order to best serve the patient and work efficiently within the health care system. In this paper I will be discussing what defines stewardship and why it is important in nursing. Next, current issues involving stewardship in

Corporate governance is based largely on trust – the trust, by the stakeholders, that revenues will be fairly shared, and that those directly involved in running the company are running it in an aboveboard, honest, and open manner, and that they represent the best

Stewardship- An organization that exercises stewardship holds their companies in custody for the best interest of the general public. Peter Block, who wrote Stewardship: Putting Service Ahead of Self-Interest, “uses stewardship to replace leadership to keep his focus on the next generation and to help us advance our concepts about control and compliance in relation to leadership” (as cited in Applied Leadership for Effective Coalitions, 2001).

Stewardship can be described as “a concept that has inspired the activities of several organizations whose mission is to preserve, protect, and maintain natural, social and economic assets for the benefit of stakeholders and communities” (Contrafatto, 2014, para. 1). The stewardship theory describes an environment where leaders feel empowered and trusted without the need of working in a controlled and monitored environment. In this type of setting, the leaders and followers work together collectively and have the best interest of the organization, its owners, and stake holders at heart. Managers are committed to the business and gain satisfaction knowing the business is being properly managed and successful.

This paper will have a detailed discussion on the shareholder theory of Milton Friedman and the stakeholder theory of Edward Freeman. Friedman argued that “neo-classical economic theory suggests that the purpose of the organisations is to make profits in their accountability to themselves and their shareholders and that only by doing so can business contribute to wealth for itself and society at large”. On the other hand, the theory of stakeholder suggests that the managers of an organisation do not only have the duty towards the firm’s shareholders; rather towards the individuals and constituencies who contribute to the company’s wealth, capacity and activities. These individuals or constituencies can be the shareholders, employees,

Corporate governance refers to ‘the ways suppliers of finance to corporations assure themselves of getting return on their investment’ (Shleifer and Vishny, 1997: 736). Corporate governance discusses the set of systems, principles and processes by which a

Hansmann and Kraakman argue that, as a matter of norms, efficiency and fact, the world continues to converge around “the ‘standard shareholder-oriented model’ of the business corporation.”

Economic science teaches us that due to their subjective needs, individuals have subjective preferences, and hence different interest. Occasionally different subjective interests give rise to conflicts of interest between contracting partners. These conflicts of interest may result in turn, in one or both parties undertaking actions that may be against the interest of the other contracting partner. The primary reason for the divergence of objectives between managers and shareholders has been attributed to separation of ownership (shareholders) and control (management) in corporations. As a consequence, agency problems

The OECD Principles of Corporate Governance states that: "Corporate governance involves a set of relationships between a company’s management, its board, its shareholders and other stakeholders. Corporate governance also provides the structure through which the objectives of the company are

As explained by Schelker (2013), the agency problem between the owners and the management of a firm is at the heart of the corporate governance literature. Hence, there is a need for a