The moderating effect of employee engagement on the relationship between exemplary transformational leadership and the performance of selected water and sewerage companies in Kenya
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Access to clean and safe water remains a critical development priority under Sustainable Development Goal (SDG) 6. However, water service providers in Sub-Saharan Africa, including Kenya, continue to experience performance challenges associated with governance, infrastructure limitations, and leadership effectiveness. This study examined the moderating effect of employee engagement on the relationship between exemplary transformational leadership and the performance of selected water and sewerage companies in Kenya. Grounded in transformational leadership theory, the three-component theory of work engagement, and the balanced scorecard framework, the study adopted a positivist philosophy and a quantitative cross-sectional survey design. Data were collected from 328 employees drawn from 13 public water companies operating under the Athi Water Works Development Agency using structured questionnaires. Exemplary transformational leadership was measured through three practices—modeling the way, challenging the process, and empowering followers—while employee engagement was assessed through vigor, dedication, and absorption. Organizational performance was evaluated using indicators of service quality, economic efficiency, and operational sustainability. Descriptive statistics, Pearson correlation, and moderated multiple regression analysis were conducted using SPSS version 27. The findings revealed that exemplary transformational leadership and employee engagement significantly and positively influenced water company performance. Importantly, employee engagement significantly moderated the relationship between exemplary transformational leadership and performance (β = −0.689, p < .05), indicating a buffering effect in which leadership had a stronger impact under conditions of low engagement. The study contributes to leadership and public sector management literature by empirically validating the moderating role of employee engagement within Kenya’s water sector. It recommends integrating employee engagement strategies with leadership development initiatives to enhance service delivery, operational efficiency, and long-term sustainability in water utilities.