The Positive Influence of Transformational Leadership in Good Corporate Governance

  • LEVERIC TAN NG
Keywords: transformational leadership, corporate governance, profitability, corporate board, executive directors, independent directors, CEO pressure on directors on firm profitability

Abstract

Transformational leadership and corporate governance are rarely studied together, and this applies to the Philippine context as well. The Philippine private corporate structure, based largely on corporate ownership, provides this research a unique and fertile ground on which to study how transformational leadership impacts good corporate governance. This study seeks to provide empirical evidence establishing the link between transformational leadership and good corporate governance, and how CEO pressure on directors on firm profitability affects this relationship. The research methodology employed is a mixed methods procedure of a concurrent triangulation strategy. Thirty corporate directors (executive directors) were given questionnaires to complete, and afterwards underwent personal interviews to provide the qualitative data required for this study. Statistical results from regression analysis show that transformational leadership positively influences good corporate governance and CEO pressure on directors on firm profitability has no effect on the relationship between transformational leadership and good corporate governance. Director perception of good corporate governance is not influenced by the presence or absence of pressure on firm profitability. Furthermore, the qualitative findings corroborate the statistical inferences from the quantitative analysis. There were several unanticipated results such as CEO duality as a moderating variable and religion as a conceptual definition by respondents for both transformational leadership and good corporate governance, which may provide abundant input for further research on leadership and corporate governance.

Published
2018-02-22