Stewardship and Governance
|Unit||BUS509 Stewardship and Governance|
In the spirit of the Parable of the Talents, stewardship is not about risk avoidance, but how best to maintain and, where possible, add value to that with which one is entrusted. In a business context, this view is captured by two notions, corporate ‘social responsibility’ and ‘governance’. ‘Stewardship’ has a wide range of meanings that are very much context -dependent. However, no matter what the context, all notions of stewardship reflect John Wesley’s view of “the good steward” as one who exercises responsible and dutiful management of something entrusted to one’s care, whether it is a company or the state of the world, with a view to maintaining and/or enhancing its value for future stakeholders, be they shareholders or generations yet to be born. In a corporate context, stewardship is the process through which directors, managers, shareholders and/or others seek to influence organisations in the direction of long-term, sustainable performance that derives from contributing to human, environmental and social well-being. In other words, with respect to the activities of an organisation, ‘stewardship’ is necessarily outward looking, so to speak, ever-mindful of the medium- and long-term impact on those ‘inside’ and ‘outside’ the organisation of what it does, and how it does it. ‘Corporate social responsibility’ is in some ways the secular articulation of the ‘outward-looking’ perspective of stewardship. ‘Governance’ refers to the procedures and practices associated with decision-making, performance and control, which provide structures and satisfy expectations of accountability and compliance in organisations. It is, so to speak, the ‘inward-looking’ perspective of stewardship. While mindful of the external legal, socio-political and ecological environment in which an organisation operates, the perspective taken in this unit is that an organisation’s governance function is essentially introspective and focused on the proper management of the organisation in the pursuit of shareholder value and/or stakeholder interests. In other words, governance is as much a matter of risk minimisation as it is a process for ensuring probity. Consequently, sound organisational governance – and, necessarily, good organisational leadership – increasingly will be judged by its impact on long-term and sustainable value creation. The focus of this unit, then, is not only on corporate governance in the traditional sense of the term (the rules, processes, or laws by which businesses are operated, regulated, and controlled), but on its intersection with stewardship as selflessly enhancing value for the greater good. The unit discusses governance and corporate social responsibility through the lens of stewardship, understood as a willingness to be held accountable for the well-being and enhancement of the interests of others..
The concept of stewardship