“You may be able to buy so­meone’s hand and back, but you cannot buy their heart, mind, and spirit.”

— Ken Blanchard

While governance and especially corporate governance is written and spoken about, stewardship is not an oft-discussed subject. The core of stewardship lies in helping perpetuate an organisation. The principle of stewardship is fundamental to governance. Stewardship is the soul of governance, the body of which evolves with corporate and social structures. Stewardship means “the careful and responsible management of so­mething entrusted to one’s care” and herein lies the crux of this principle. Stewardship is an exercise of faith, responsibility, and commitment.

Contemporary business environment is rapidly forcing management and organisati­ons to pursue ethically responsible, innovative and pr­ofitable businesses. As we ascend the corporate political ladders, an increasing responsibility is placed upon us and that responsibility is the duty of care. To care as our own for resources entrusted to us. If this becomes the underlying principle for each and every action that we take, then we have taken a huge leap towards governance whether in corporate or socio-political environment.

It is important first to build a culture of trust in the organisation. Top management’s behaviours that instill trust in and motivate staff, as well as shape the organisational context, facilitate stewardship behaviours. Each individual th­en becomes the leader who instills in his or her followers the same sense of ownership and responsibility that was instilled in them. Through leading by example, empowering people, encouraging a culture of participation and open communication; management becomes the initiator of the creation of an organisation with trust relations and stewardship behaviours. Trustworthiness represents a strategic tool for management’s enhancement of stewardship intentions. The organisation develops a culture where self interest, dependency and control is replaced with service, responsibility, and partnership. The objective is to put real meaning into the ideas of service and accountability.

It is interesting to note that regulators are now looking at stewardship. The Financial Reporting Council (FRC) of the UK published the UK stewardship code in July 2010. “It aims to enhance the quality of engagement between institutional investors and companies to help improve long-term returns to shareholders and the efficient exercise of governance responsibilities.” It is interesting that the FRC sees the “stewardship code as complementary to the UK Corporate Governance Co­de”.

Many leaders think of ethics as a question of personal scruples. So what does ethics have to do with management? Ethics is as much an organisational as a personal issue. An integrity-based approach to ethics management lays emphasis on management responsibility for ethical behaviour. Integrity and ethics strategies may vary in design and scope but they must be integrated into the day-to-day operations of the organisation and ingrained into the mind and heart of every individual who works for that organisation. A classic example of this principle was Arthur Andersen. Ask any of the former employees and they will speak about the spirit of stewardship that they were all brought up with. Once you joined the firm, you contributed to building the firm and making it a better place to work in.

It was instilled in the partners that they need to treat the responsibility cast on them such that they were able to leave behind a much stronger firm than they inherited to the next set of partners. This principle was imbibed into the DNA of each partner. Doing the right thing was the guiding principle, whatever level you were in the firm. The firm’s founder was the very model of integrity, religiously following his maxim, “Think straight, talk straight.” But in the late 90s, long after the founder’s death, the firm managers got so caught up in the mad scramble for power and wealth that they forgot “that the true purpose of their job was to protect the investing public”.

The one organisation that demonstrates stewardship in spirit and action is the Tata group. Leadership with trust is what they preach and practice. The commitment to stakeholders and the community as a whole is defined in the words of their founder Jamshetji N Tata, “In a free enterprise, the community is not another stakeholder, but it is in fact the very purpose of its existence.” The group’s code of conduct speaks about national interest, corporate citizenship and ethical conduct, among other things. The leaders of this great organisation have lived by the values of stewardship and created abundance and success not just for themselves and their companies but for communities and geographies in which they operate. Today, we associate the Tata name with trust and with integrity. This is an exemplary example that is hard to follow but India must take pride in what the Tatas have built and leaders of organisations must learn from it.

One can conclude by saying that stewardship is the cornerstone on which all other elements of governance bind themselves to. It is important that this word is understood by both corporate and political leaders as each discharge their duties and responsibilities that their positions cast on them.