Analysis of Ethical Leadership and Organizational Commitment in the Nigerian Insurance Sector: A Study in Lagos and Ogun States

This study analyzed the relationship between ethical leadership and organizational commitment in the Nigerian insurance sector, with evidence from selected insurance firms in Lagos and Ogun States, South West Nigeria. Ethical leadership, characterized by principled decision-making, transparency, and modeling of moral behavior, is increasingly recognized as a critical determinant of employee trust, engagement, and long-term organizational commitment. In the insurance sector, where public trust is paramount, the quality of ethical leadership has significant implications for institutional reputation and workforce stability. Grounded in the Social Learning Theory and the Three-Component Model of Organizational Commitment, a cross-sectional survey design was adopted. The population comprised 560 employees across fifteen insurance firms in Lagos Island, Ikeja, and Sagamu. A stratified sample of 280 employees was selected. The Ethical Leadership Scale and the Organizational Commitment Questionnaire, both validated for the Nigerian corporate context, were used for data collection. Pearson correlation, multiple regression, and mediation analysis using the PROCESS macro were employed. Findings reveal that ethical leadership significantly and positively predicts all three components of organizational commitment, with normative commitment showing the strongest association. Employee trust fully mediates the relationship between ethical leadership and affective commitment. The study recommends that the National Insurance Commission should incorporate ethical leadership standards into its corporate governance guidelines for insurance firms in Nigeria. Keywords: ethical leadership, organizational commitment, insurance sector, Lagos, South West Nigeria