The theoretical thrust of governance research varies depending on which sector
is under investigation. Within corporate governance theory the dominant paradigm is
that of a stewardship model of governance (Muth and Donaldson, 1998) which
emphasises “the capacity and willingness of managers to balance different interests in
the professional pursuit of company strategy” (Clarke, 2005, p. 604). In most if not all
cases the company strategy is financial maximisation either through sales, share value,
dividends or other financial measures. Whichever measure is used the aim is the same
– to maximise the wealth of shareholders. The concept of stewardship emphasises the
role of the board in their capacity as agents of shareholders and whose primary task is
to utilise share capital in ways that will result in increased value. The board are
believed to have a duty to act in the interests of the owners of the corporation and so
are responsible for facilitating organisational performance through effective
decision-making which is achieved by electing board members on the basis of their
expertise (Iecovich, 2005).