• Weru Mwangi Management University of Africa
  • Emmanuel Awuor, PhD Management University of Africa
  • Peter Kithae, PhD Management University of Africa


The study aimed at establishing the influence of leadership style and financial innovation on the financial performance of commercial banks in Kenya. Positivist philosophy as well as correlational and cross-sectional research designs were adopted with the target population comprising of commercial banks’ management staff. Out of the 10,395 management staff, 385 respondents were selected. Structured questionnaires were used to collect primary data with descriptive and inferential statistics being used for data analysis. Study hypothesis and significance tests were conducted using parametric test statistics with a 95% level of significance and 5% confidence interval being adopted. The results indicated that transformational leadership had a positive and significant partial impact while democratic leadership had a positive and significant partial effect on financial performance of commercial banks in Kenya. On the other hand, autocratic leadership had a positive and significant partial effect on financial while Laissez-Faire leadership had a negative and significant partial effect on financial performance of commercial banks in Kenya. The findings also indicates that financial innovation has a partial mediation effect on the relationship between leadership style and financial performance of commercial banks. The study recommends that that top managers of the commercial banks need to take up effective transformational and democratic leadership style in their management programs. This can be achieved through staff training and development using both in-house and open training programs as well as continuing development programs. Banks should join hands with training and educational institutions in regard to development of leadership modules under their training programs. Bank management and the Central Bank of Kenya should also join hands in promoting innovation as well as rewarding innovative behavior.

Keywords: Financial Performance, Financial Innovation, Leadership Style, Transformational Leadership, Democratic Leadership, Laissez Faire Leadership, Autocratic Leadership

Author Biographies

Weru Mwangi, Management University of Africa

PhD Candidate, Management University of Africa, Kenya

Emmanuel Awuor, PhD, Management University of Africa

Associate Professor, School of Management & Leadership, Management University of Africa, Kenya

Peter Kithae, PhD, Management University of Africa

Associate Professor, School of Management & Leadership, Management University of Africa, Kenya


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How to Cite
Mwangi, W., Awuor, E., & Kithae, P. (2022). LEADERSHIP STYLE, FINANCIAL INNOVATION AND FINANCIAL PERFORMANCE OF COMMERCIAL BANKS IN KENYA. African Journal of Emerging Issues, 4(10), 78 - 104. Retrieved from https://ajoeijournals.org/sys/index.php/ajoei/article/view/338