Stewardship Theory-

The steward theory states that a steward protects and maximizes shareholders' wealth through firm Performance. Stewards are company executives and managers working for the shareholders, protects and make profits for the shareholders. The stewards are satisfied and motivated when organizational success is attained. It stresses on the position of employees or executives to act more autonomously so that the shareholders’ returns are maximized. The employees take ownership of their jobs and work at them diligently.

Agency Theory-

Agency theory defines the relationship between the principals (such as shareholders of the company) and agents (such as directors of the company). According to this theory, the principals of the company hire the agents to perform work. The principals delegate the work of running the business to the directors or managers, who are agents of shareholders. The shareholders expect the agents to act and make decisions in the best interest of the principal. On the contrary, it is not necessary that agents make decisions in the best interests of the principals. The agent may be succumbed to self-interest, opportunistic behavior, and fall short of expectations of the principal. The key feature of agency theory is the separation of ownership and control. The theory prescribes that people or employees are held accountable in their tasks and responsibilities. Rewards and Punishments can be used to correct the priorities of agents.