Why Stewardship Is a Hallmark of Successful Leadership

by Granville Triumph

In a recent interview, Russ Kinnel, Director of Mutual Fund Research at Morningstar, talked about stewardship. According to Morningstar’s research, he said, the best mutual funds are also good stewards. In fact, Morningstar assigns “Stewardship Grades” as one of the factors that help it determine the potential success of the funds it analyzes.


You don’t hear the word “stewardship” much. It’s often used in the context of environmental issues, but it’s really much broader than that. Stewardship encompasses the activities of planning and management along with an ethical component of responsibility. Good stewards handle the resources in their care so that the value of those resources is preserved or enhanced. They also assume full accountability for their actions.

It’s interesting that Kinnel applies the concept of stewardship in the evaluation of mutual funds. After all, isn’t the purpose of a fund simply to make money for its investors? Kinnel says that funds that are good stewards focus on developing their analysts and helping their investors achieve their strategic goals, and that approach pays off in terms of long-term performance. Turns out these funds typically have the lowest fees — another leading indicator of success, according to Kinnel.

In a sense, stewardship boils down to long-term thinking versus short-term gain. Rather than relying upon gimmicks and hype, the mutual funds that practice good stewardship develop ethical strategies, put service above self-interest and communicate honestly and frequently.

These traits are also the hallmarks of great leaders. Great leaders recognize that business isn’t only about making money and beating the competition. It’s about doing the best they can to achieve the greatest good for everyone and everything involved.

That’s not the same thing as paternalism. Many leaders make the mistake of assuming that they’re supposed to “take care of” their subordinates — create a nurturing environment that helps subordinates grow and achieve their goals. However, this approach perpetuates the myth that subordinates need a leader, and makes it difficult if not impossible to develop a stewardship-based organization.

If we are to embrace stewardship, we must accept that everyone in the organization possesses both power and responsibility. We must also establish a culture that emphasizes community, shared values and accountability. There are simple steps leaders can take to begin creating such a culture:

  • Make sure the company vision or mission statement reflects the values of stewardship and ethical responsibility.
  • Develop company policies that emphasize fairness, integrity, unity and respect.
  • Empower individuals to make decisions and try not to second-guess those decisions.
  • Conduct meetings in a way that encourages open, respectful discussion.
  • Where possible, eliminate symbols of privilege and prestige, such as nicer offices and preferred parking spaces.
  • Integrate performance expectations with accountability.
  • Acknowledge the interdependency and common goals of everyone in the organization.
  • Recognize the power of self-determination within every individual.

Leaders who exploit the resources in their control for temporary gain will not enjoy long-term success. Leaders who think they know what’s best for their subordinates will not earn the respect and commitment of those individuals. However, leaders who practice stewardship principles will have a strong foundation for achieving their organizational goals.

Leave a Reply

Your email address will not be published. Required fields are marked *