Emotional intelligence and transformational leadership strategy: The study of the financial sector governance in the emerging market

Abstract

Emotional intelligence (EI) in recent years has emerged as a key component of effective leadership as the leader of an organization needs to understand the emotions of their own and others and match their behaviors with other stakeholders. This ensures transformational leadership (TL), considered critically important today to an organization for lasting success (Makkar & Basu, 2017; Baba et al., 2021). Against such a backdrop, the study aims to examine the causal relationship between EI and TL. Taking the sample data from Nepalese commercial banks, this study has employed a pre-diagnostic test of data and information to check their reliability through Cronbach’s alpha test by following average variance extracted (AVE) to check the discriminant validity, Chi-square statistics and degrees of freedom (CMIN/DF), the goodness of fit index (GFI), adjusted goodness of fit index (AGFI), comparative fit index (CFI) to check the fitness of model and root mean square error of approximation (RMSEA) for structural equation modeling (SEM). The study has come to reaffirm the theoretical validity of the premise that EI has a significant positive impact on TL as its critical determinants such as self-awareness (SA), self-management (SM), social awareness (SoA), and relationship management (RM) have a positive and significant impact on TL. However, gender has not moderated the relationship between EI and TL whereas age has significantly moderated the relationship between EI and TL.