Understanding corporate stewardship, governance and sustainability: A landscape study
This report seeks to develop a framework to understand the nexus between corporate stewardship, sustainability and governance. The objective of this study is to establish and contribute to a body of knowledge surrounding the concept and practice of corporate stewardship, and to develop a clearer understanding of its nexus to the concepts and practice of corporate sustainability and governance.
The report establishes several key findings, summarised below:
- Corporate stewardship is a process of leadership and a management mindset, while corporate sustainability is more outcome-based. In the absence of environmental and social regulations, stewardship is needed to practice and achieve sustainability
- Corporate governance mechanisms are evolved out of agency theory, and are intended to provide checks and balances in the organisation to protect the interests of the shareholders. On itself, it is more of a checkbox exercise instead of a values-driven system. Corporate stewardship, on the other hand, gives rise to an enlightened governance system that benefits the organisation in the longer run
- The ideal sweet spot for a company to strive towards is the nexus between the three: corporate stewardship, corporate sustainability and corporate governance. Companies may be in a mix of various stages as of now, for example having some sustainability efforts, but without any stewardship-based leadership, or implementing some form of agency theory and checklist-based governance mechanisms in letter but not in spirit. Only through achieving the sweet spot of the nexus between the three can a company thrive as a well-stewarded company