High Performance Boards, 2nd Edition

CHAPTER 20Stewardship from the Board

More than ever, boards need to act as a counter-balance to the short-term thinking that pervades much of the corporate world. To avoid succumbing to the pressures that drive the behaviour of many business leaders, boards must remain vigilant and define clear boundaries to guide decision-making for the long term. As such, they act as stewards, enabling the organisation to thrive and sustain growth while enhancing the wealth of its stakeholders and the well-being of the societies in which it operates. This is what we call stewardship.

Stewardship draws on notions of accountability, long-term orientation, and responsibility for protecting assets over time. With the clear objective of benefiting society with its aligned values, structures, and processes, stewardship provides a firm's leaders and employees with the clarity of purpose to generate value in the broader sense. The essential idea is that those who are entrusted with wealth of any kind have an obligation to hand those assets on in better shape than they inherited them. And the board has a key role to play as a steward of the organisation. I have explored this topic in depth with Ong Boon Hwee, then CEO of the Stewardship Asia Centre, in a separate book.¹

Society increasingly expects business to contribute to creating lasting and more inclusive value. At the same time, firm ownership is ever more complex and varied – including state-owned enterprises, family businesses, sovereign wealth ...