Boards of Directors: comparative essay on the perspectives of Agency Theory and Stewardship Theory

Abstract

The topic of corporate governance has become a widely studied and analyzed element in the academic and corporate world. Factors such as the growth and development of organizations, the dispersion of capital and the various accounting scandals made the discussion about good management practices an essential element in the organizational context. Thus, boards of directors have become the focus of efforts to improve governance, since their performance has greater flexibility and autonomy than external controls to monitor and adjust the behavior of companies. Considering the importance of councils for the development and improvement of governance, this essay aimed to describe, analyze and compare two of the main theories that support the theme: the agency theory, which represents the mainstream theoretical framework, and the stewardship theory, which emerges with assumptions contrary to the first, analyzing governance from a new perspective. With regard to the Agency Theory, the literature presents results that show that a board formed by a low number of directors, with a representative number of external members together with the non-duality of accumulation of the position of company manager and chairman of the board contribute to minimize conflicts and agency costs. As for the Stewardship Theory, there is a predominance of the understanding that it emerges with an alternative vision and contrary to the Agency Theory, bringing a new model of "man" or "agent", which considers not only their personal goals, but aims, first, the well-being of the organization.