Agency Theory And Stewardship Theory Essay examples

Agency Theory And Stewardship Theory Essay examples

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Agency Theory and Stewardship Theory
Corporate governance is broad term used to refer to the different policies and regulations that a company follows to ensure that the interest of investors, employees, customers and suppliers are maintained. It is meant to ensure there is no corruption, profit loss, and that the company is protected from any legal issues. A company can use one of several governance theories as a model to run successfully. Agency Theory and Stewardship Theory are two of the several theories used by companies. Agency Theory believes that shareholders interest requires separation of CEO and board of directors for a checks and balances effect. Stewardship theory believes that leaders have aligned goals and will work together for the best interest of shareholders.
Board of Directors
An example of a company with strong corporate governance is The Home Depot.
The Home Depot is an example of a company that uses their leaders to enforce corporate governance with rules and regulations called "standard of performance" are put forth for employees as well as for leaders themselves. They have a board of directors that is "dedicated to continuing the company 's leadership position in matters of corporate governance and to maintaining an active role in the business"(Homedepot.com, 2016). Board of directors are a group of people that are chosen to oversee a company and make decisions based on its best interest. They are responsible for making major company decisions, policies, and are the representatives of their stockholders. Based on the company, members of the board are either appointed or elected. The Home Depot holds elections every year in an annual meeting of shareholders. The nominating and corporate governance ...


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...gnostic factors to evaluate the company. Strategic audit helps corporate governance by allowing leaders to ensure that the business is operating in the best interest of the company and shareholders. Identifying the short comings of a company gives them an opportunity to compose a strategy to correct the issues. An example of The Home Depot using a strategic audit is its “voice of associate” survey given every year to associates as well “voice of the customers” survey given to customers. The employee survey consists of question about the overall company as well as the specific location. Customer survey is provided to all customers at the end of their receipts with the chance that a customer will be entered in a raffle to win a five-thousand-dollar gift card. Management is provided with the survey results in order to address issues and overall maintain a successful comp

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