The Mediating Role of Ethical Leadership in the Relationship Between Perceived Governance Practices and Organizational Effectiveness in the UAE

Abstract

This study examines the relationship between perceived governance practices and employee-perceived organizational effectiveness, as well as the mediating role of ethical leadership in UAE port organizations. Although governance reforms have gained increasing attention in the UAE, limited research has explored how employees’ perceptions of governance practices influence organizational effectiveness through leadership. A quantitative research design was adopted, and data were collected from operational and supervisory employees at DP World and Abu Dhabi Ports Group using a structured questionnaire. A total of 192 valid responses were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The results indicate that perceived governance practices have a significant positive effect on employee-perceived organizational effectiveness and ethical leadership. Ethical leadership also positively influences employee-perceived organizational effectiveness and partially mediates the relationship between perceived governance practices and organizational effectiveness. These findings suggest that governance practices are more effective when reinforced by ethical leadership that promotes transparency, accountability, and fairness. The study contributes to the governance and leadership literature by integrating Agency Theory and Social Learning Theory within an employee perception framework. Practically, the findings provide insights for managers and policymakers seeking to strengthen governance practices and ethical leadership to enhance organizational effectiveness and support the long-term competitiveness of UAE port organizations.