Creative techniques to build a high-performance board.
Directors face mounting pressure to navigate complex governance landscapes while upholding fiduciary duties. New research by our team at the Adelaide Business School — Adaptive Stewardship: Directors’ Duties in Action — shows how directors can operationalise stewardship to enhance organisational performance.
Drawing on in-depth interviews with 52 directors across 17 industries, the study reveals a crucial gap — while “stewardship” is widely referenced in governance discourse, its meaning is not uniform. Directors often interpret the term in different ways, shaping decision-making and stakeholder engagement.
The research team of Dr Tracey Dodd, PhD scholar Nicholas Marzohl and Prof Stephen Zhang unpacked how stewardship functions in practice, providing directors with a clearer framework to fulfill their duties. By demystifying the concept, the aim is to give boards actionable insights to strengthen governance practices.
The Corporations Act 2001 says directors have a duty to act in the best interests of the organisation. In fulfilling this duty, they are often regarded as “stewards”, with the organisation’s long-term success as their guiding principle. While shareholder interests are central, directors can and should also consider a range of stakeholder interests when shaping actions to achieve this goal. However, directors have considerable discretion to identify the company’s best interests and it is not always clear how they interpret and enact their role as stewards.
The interviews revealed that effective stewardship is not solely a product of formal training. It is honed through personal experience, mentorship and a deep-seated commitment to long-term success. Directors view their role as a blend of the following:
- Corporate caretaking: Managing assets with an eye on sustainability not short-term profit
- Governance leadership: Establishing robust “guardrails” that inspire ethical decision-making and accountability
- Social impact: Upholding values that extend the organisation’s influence far beyond the balance sheet.
The directors we spoke to framed stewardship in two distinct ways — from a personal responsibility standpoint and from the perspective of securing the organisation’s long-term future.
On a personal level, directors saw it as a blend of corporate, governance and social responsibility. Corporate stewardship was rooted in fiduciary duties and managing the organisation’s assets — essentially, “taking care of something without necessarily owning it”.
But it didn’t stop there. Our interviewees said governance stewardship was about ensuring “good governance” — setting clear “guardrails” for leadership, overseeing the organisation’s activities and making strategic decisions.
Social stewardship expanded the scope even further, with directors emphasising values-driven leadership — doing the right thing, upholding the organisation’s values and promoting social goals beyond financial performance.
The second perspective shifted the focus towards the organisation itself. Here, it was about securing the company’s future, “navigating” it through challenges and guiding it in the right direction.
Many directors viewed stewardship as an ongoing commitment to continuous improvement — “leaving something better” than they found it. In this view, it wasn’t just about the present, but about future-proofing the organisation and ensuring its longevity.
Another core theme was stakeholder primacy, with directors stressing the importance of considering “stakeholders into perpetuity” — thinking about the long-term impact on everyone involved, from employees to the community and the environment.
What became clear through these interviews was the foundation of stewardship for many directors is not just learned from formal training or professional development, although these are important. Instead, much of their understanding comes from personal experiences — mentorship, life values and experiential learning.
One director even pointed out that formal learning accounted for just 10 per cent of their stewardship understanding. This suggests it is as much about personal growth and reflection as it is about institutional knowledge.
Key numbers
- 30 of the directors interviewed identified as female (57%) and 22 as male (42%)
- 44% reported they experienced “bad stewardship” linked to instances where the organisation prioritised the concerns over a stakeholder group at the expense of long-term organisational success
- 57% defined stewardship as requiring consideration of the broader community and society, ensuring the organisation’s purpose is upheld, which may extend beyond the pursuit of profit
- 67% noted their diverse background (gender, ethnicity, upbringing, geographic location) influenced their view of stewardship
What’s next
In essence, we see stewardship as adaptive — a concept that shifts over time in response to changing circumstances, personal growth and evolving organisational needs. This stands in contrast to the traditional static or legalistic view of it as a fixed responsibility. The reality is, stewardship is fluid. Of course, there are foundational tenets of directorship, but the experience of our interviewees shows how as individuals, the careful curation of a tailored understanding of stewardship is a strategic imperative.
Organisational context plays a huge role in shaping how stewardship is enacted. Directors who served on different types of boards — whether for-profit or NFP, publicly listed or privately held — shared that it is deeply context-specific. What works for one organisation may not work for another. This highlights its adaptive nature. It must evolve in response to both internal and external factors. Directors must balance their core values with the flexibility to adapt to the ever-changing business landscape. Ultimately, stewardship is a malleable approach that grows as organisations and their leaders do.
In boardrooms across industries, directors face a fundamental and deeply complex question: What is the right thing to do? Stewardship is a deceptively simple phrase — one that suggests clarity, moral certainty and a singular path forward. But the reality is far messier.
“The notion of the right thing to do is something easy to say, but not always straightforward,” one director explained. “At times, it’s very clear — due to legal reasons, moral reasons, humanitarian reasons. In those cases, you don’t have misalignment. You might have 10 years ago, but you don’t tend to have that now. It’s when things are about choices and trade-offs that you have tension and challenges.”
This is the often unseen work of modern directors: balancing present and future interests, managing risk while protecting reputation and making decisions to shape industries long after quarterly earnings fade from memory. The best directors understand governance is not just about safeguarding assets — it is about growth, trust and a principled approach to leadership.
Trust is a fragile currency. The directors we spoke with shared that trust must be upheld even when it is difficult to do so, when stakeholders pull in opposing directions and when the path forward is uncertain. Today’s directors are expected not only to steer companies through immediate crises, but to ensure the institutions they oversee remain resilient for years to come.
The work of an organisational steward is never done. And neither are the debates that define it.
Director checklist
- Am I effectively considering the interests of key stakeholders — employees, customers, investors, communities — ensuring they are integrated into our decision-making process?
- How am I balancing the need for short-term financial performance with ensuring the organisation remains sustainable in the long run?
- When conflicts arise between stakeholder interests, how do I ensure decisions are made with the long-term wellbeing of the organisation in mind?
- Are my actions aligned with the organisation’s core values and am I leading by example in promoting ethical conduct?
- Do I regularly examine my personal values and beliefs to ensure my practices align with my values and the needs of the organisation?
- Have I put clear governance guardrails in place to guide leadership, while ensuring oversight and accountability across the organisation?
- Am I actively identifying emerging trends and potential risks, and taking proactive steps to ensure the organisation is prepared to navigate them?
- Am I actively seeking out opportunities for personal development to ensure my approach to stewardship remains adaptive, responsive and effective?
- How am I encouraging continuous improvement and innovation within the organisation?
Call to action
This research invites directors and leaders to reimagine their role — not just as custodians of corporate assets, but as architects of a resilient, purpose-driven future.
As a next step, the research team is developing a “stewardship scale” to help boards and management understand and assess the extent to which these principles are embedded in governance practices.
Access the AICD webinar recording of Contemporary Stewardship: Insights and actions HERE.
Dr Tracey Dodd is a non-executive director, AICD faculty member and academic at the Adelaide Business School. Nicholas Marzohl is a PhD candidate at the Adelaide Business School. Prof Stephen Zhang is the Maness chair in Entrepreneurship at Baylor University, US.
This article first appeared under the headline ‘The Strategist’ in the April 2025 issue of Company Director magazine.
Latest news
Already a member?
Login to view this content