Agent and Stewardship Behavior

What is it about?

Two competing theories, agency and stewardship theories, make broad assumptions about chief executive officer (CEO) behaviors. This leads to boards of directors treating CEOs based on the theoretical perspective they subscribe to. However, to date, no research exists to measure whether a CEO is closer to an "agent" or a "steward." Our article proposes various organizational outcomes depending on where a CEO resides on the agent-steward continuum. Further, we encourage researchers to develop an agent-steward continuum whereby CEOs can be individually classified along this continuum and then managed appropriately by their boards. Doing so could lead to more effective boards and thus improved organizational performance.

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Why is it important?

If researchers can measure CEO behaviors and intentions and then place them along an agent to steward continuum, boards could use the results as a resource to appropriately manage their relationships with CEOs. For example, if a CEO is deemed to be more agent-like where they use their position of power to maximize their personal financial results at the expense of the organization, boards would take steps to mitigate this possibility and have more of a monitoring role, whereas if a CEO is deemed to be more steward-like where they balance their personal interests with those of other stakeholders, the board could take more of an advisory role, and could relax their monitoring role.