Which theory views management as custodians of the long-term interests of stakeholders?

Stewardship theory is centered on the idea that managers act as stewards of the company and are fundamentally aligned with the interests of its stakeholders. This perspective emphasizes the responsibility of managers to prioritize the long-term wellbeing of those they serve, which includes shareholders, employees, customers, and the broader community. Under stewardship theory, it is believed that when managers are entrusted with the power and resources of an organization, they will inherently seek to protect and promote the welfare of the stakeholders, viewing their role as guardians of both corporate assets and stakeholder interests.

In contrast, other theories focus on different aspects of the organizational dynamic. Legitimacy theory emphasizes the social license to operate and the need for organizations to align their actions with societal expectations to maintain legitimacy. Signaling/disclosure theory is concerned with how companies communicate their quality or intentions to stakeholders through various signals, rather than focusing on stakeholder interests. Institutional theory examines how institutional environments shape organizational behavior, focusing more on social norms and pressures rather than the stewardship role of management. Thus, stewardship theory is the most aligned with the notion of management as custodians of the long-term interests of stakeholders.