Linking Ethical Leadership To Corporate Governance Effectiveness: A Study Of Public Interest Entities (Pies) In Nigeria

Abstract

Ethical leadership is an important and arguably a concept that influences corporate governance effectiveness of Public Interest Entities-PIEs. Guided by moral foundation theory, this study investigated the influence of ethical leadership on corporate governance effectiveness of PIEs in Nigeria. The study used cross- sectional survey research design to obtain data from 288 senior managers in 96 PIEs in the Nigeria specifically in the banking and insurance sectors. Linear regression analysis was used to test the hypothesis. Results of the hypothesis testing showed that ethical leadership influences all the four dimensions of corporate governance effectiveness. Precisely, ethical leadership and board practices (β= .356, p<.001), ethical leadership and transparent disclosure (β= .445, p<.001), ethical leadership and board commitment (β= .423, p<.001), and ethical leadership and control environment (β= .390, R² =16.3, p<.001). Based on the findings, the study concludes that the ethical stance of leaders is a significant issue towards influencing and improving corporate governance effectiveness.  The study recommends that to improve ethical leadership, ethical codes of conduct must be stated clearly and appropriate guidelines put in place to ensure that corporate leaders understand expectations and this should be contemplated within the culture of leadership recruitment, training and capacity development of those in leadership position