About the Author(s)


Richard Khumalo Email symbol
Department of Industrial Psychology and People Management, College of Business and Economics, University of Johannesburg, Johannesburg, South Africa

Lia M. Hewitt symbol
Department of Industrial Psychology and People Management, College of Business and Economics, University of Johannesburg, Johannesburg, South Africa

MaryAnne Harrop-Allin symbol
Department of Industrial Psychology and People Management, College of Business and Economics, University of Johannesburg, Johannesburg, South Africa

Citation


Khumalo, R., Hewitt, L.M., & Harrop-Allin, M. (2025). Addressing toxicity and enhancing inclusive culture in the banking sector through spiritual leadership. SA Journal of Human Resource Management/SA Tydskrif vir Menslikehulpbronbestuur, 23(0), a2929. https://doi.org/10.4102/sajhrm.v23i0.2929

Original Research

Addressing toxicity and enhancing inclusive culture in the banking sector through spiritual leadership

Richard Khumalo, Lia M. Hewitt, MaryAnne Harrop-Allin

Received: 11 Dec. 2024; Accepted: 02 Apr. 2025; Published: 24 June 2025

Copyright: © 2025. The Author(s). Licensee: AOSIS.
This is an Open Access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

Orientation: Workplace spirituality and spiritual leadership may previously have been just new buzzwords in the corporate world, but they have now become important phenomena of significant scientific inquiry.

Research purpose: The research explored how spiritual leadership can address toxic workplace cultures, enhance inclusivity, and promote employee well-being in the banking sector in South Africa to ensure transformation is fast-tracked in the sector.

Motivation for the study: This motivation succinctly captures the study’s purpose by emphasising the pressing challenges in the banking sector, such as toxicity and exclusivity, while highlighting the potential of spiritual leadership to drive transformation and success.

Research approach/design and method: A qualitative, exploratory research approach was adopted. Primary data were gathered through semi-structured interviews with 9 participants and 21 personal narratives, all sourced from a large South African bank. Data were analysed using interpretive phenomenological analysis.

Main findings: Leadership is dominated by autocratic and transactional styles, further hindering transformation and reinforcing exclusionary practices. Additionally, there is a general lack of appreciation for diversity within the workplace. However, cultural and organisational values align with elements of spiritual leadership. Specific facilitators unique to the banking sector can enhance spiritual leadership to drive transformation by addressing systemic issues and promoting a more inclusive culture, and the adoption of spiritual leadership was shown to enhance workplace dynamics and foster a more inclusive environment.

Practical/managerial implications: Workplace spirituality must be prioritised to enhance employees’ well-being, happiness, contentment, and satisfaction across diverse employee groups.

Contribution/value-add: This study contributes to leadership and organisational research by highlighting the role of spiritual leadership in addressing toxic workplace cultures, fostering inclusivity, and enhancing employee well-being, using transformational leadership as a strategy.

Keywords: spiritual leadership; workplace toxicity; transformation; employee well-being; banking sector leadership.

Introduction

Every organisation has leadership, which manifests itself in different leadership styles through which leaders guide and propel businesses towards achieving their strategic goals (Hao & Yazdanifard, 2015). Transformational leadership theory, as proposed by Bass (1985), provides a framework for understanding how leaders influence organisational success by inspiring and motivating employees. According to this theory, transformational leaders articulate a compelling vision, foster innovation, and cultivate an environment where employees feel valued and motivated to contribute to organisational goals (Bass, 1985). While every business aspires to secure a substantial, if not dominant, market share, the success of its business strategy is ultimately contingent on the calibre of leadership. Leaders are responsible for crafting strategies, clarifying organisational objectives, and ensuring that employees perform optimally (Mubarak & Wan Yusoff, 2019).

To remain competitive in an increasingly complex and diverse world, organisations require leaders who value transformation. Transformational leadership theory underscores the importance of leaders who inspire change, develop their teams, and align organisational culture with emerging challenges (Northouse, 2021). Cletus et al. (2018) argue that leaders who embody transformational leadership traits, such as intellectual stimulation, individualised consideration, inspirational motivation, and idealised influence, are particularly crucial in navigating today’s dynamic business environment.

In South Africa, challenges such as race and gender inequality, class disparities, and cultural tensions persist within the workplace. These structural challenges present significant barriers to workplace transformation, requiring leadership approaches that embrace inclusivity and diversity (Booysen, 2007). In the banking sector, these challenges highlight the necessity for leaders who can implement strategies to foster equality and equity. Cox and Blake (1991) emphasise that leadership in multicultural settings is inherently complex, particularly when leaders lack an understanding of how their own leadership approach influences workplace dynamics. Transformational leaders, by contrast, recognise the importance of inclusive leadership practices and actively work towards integrating diverse perspectives into organisational decision-making.

Furthermore, Fry (2003) argues that ethical and value-based leadership, such as spiritual leadership, is essential in addressing modern workplace challenges, particularly in environments where unethical behaviours persist. Spiritual leadership, as a leadership model, integrates vision, altruistic love, and a sense of calling to create a high-performance and ethically sound organisational culture. Without visionary and value-driven leadership, transformation efforts remain superficial, and the lack of effective leader-led transformation continues to hinder meaningful change. Therefore, organisations must embrace transformational leadership as a strategic approach to address contemporary workplace challenges and drive sustainable success.

Research purpose and objective

This paper explores how spiritual leadership, as conceptualised by Fry (2003), can address toxic workplace cultures, enhance inclusivity, and promote employee well-being in the banking sector. By emphasising vision, altruistic love, and a sense of calling, spiritual leadership fosters ethical decision-making and intrinsic motivation. This approach creates a values-driven workplace that supports employee engagement, ethical behaviour, and long-term organisational success.

Literature review

Role of leadership

Historically, Klingborgg et al. (2006) view leadership as a temporary service role that has been evolving over the years, and in modern-day leadership can be understood as an individual’s ability to build winning teams and motivate others to be able to achieve organisational goals. This aligns with Northouse’s (2018, 2021) view which presents leadership as a process whereby a leader influences a team to achieve common objectives or goals. Therefore, leadership is important in any organisation for the realisation of organisational objectives and strategic imperatives (Barua et al., 2019).

Organisations need effective leadership to ensure effective changes. For this to happen, leaders must provide direction, assist employees to see the direction the organisation is taking, empower them to be successful and set the example for employees to follow (Asbari et al., 2021). Importantly, effective leaders have the ability to foresee and take remedial steps where the negative impact of transformation occurs, and these leaders care for employees’ needs and afford them respect and dignity to motivate them to improve performance and organisational commitment to their work (Yasin Ghadi et al., 2013). They comprehend that transformation is complex and requires a systematic and coordinated way for success.

Spiritual leadership

Spiritual leadership, arising from a need for values-driven cultures that actively propel workers to focus on a shared vision, accompanied by effective and motivating leadership, has gained prominence in the 21st century (Meng, 2016). It is founded in spirituality, which entails humans’ connection with something much bigger and beyond self-serving, where they experience meaning and purpose in their lives (Sharma & Sharma, 2016). In the main, spirituality is an important phenomenon which Yang and Fry (2018) describe as human values that facilitate human happiness, and these values are love, compassion, patience, tolerance, forgiveness, contentment, a sense of responsibility, a sense of wholeness, and harmony. Bhattacharyya and Afroz (2019) submit that spirituality plays a key role in employees’ challenges, such as employee frustrations, anxiety, and behavioural problems in the workplace. Spiritual leadership entails using a transcendent vision and fostering a corporate culture based on altruistic love to motivate and inspire employees (Fry, 2003). Meng (2016, p. 412) defines spiritual leadership as a leadership approach that ‘mediates the care of one’s body, mind, heart, and spirit of the followers’, fostering cooperation, trust, mutual care, and commitment through the development of inspiring vision and mission statements. This leadership style is essential for satisfying the fundamental spiritual needs of both leaders and followers, promoting a sense of calling and membership, and creating vision and value congruence across individual, team, and organisational levels (Fry & Nisiewicz, 2013). Ultimately, spiritual leadership enhances employee well-being, organisational commitment, productivity, and social responsibility while fostering ethical and meaningful workplace engagement (Ghaedi et al., 2021).

In recent years, spiritual leadership has gained growing scholarly attention because of the increasing need for moral and ethical leadership in organisations. Leaders who adopt this approach recognise their responsibility in instilling hope, fostering employee well-being, and creating meaningful work experiences that drive positive workplace outcomes (Samul, 2024; Udahemuka et al., 2024). Matthews (2021) highlights those organisations, like individuals, seek spiritual fulfilment beyond material success, making spiritual leadership an essential component in modern organisational strategy and sustainability.

Unlike other leadership styles, spiritual leadership integrates vision, hope or faith, and altruistic love, making it a powerful driver of organisational transformation. Ghaedi et al. (2021, p. 350) assert that spiritual leadership fosters ‘love, care, meaningfulness, and above all, a sense of calling’, reinforcing its role in creating ethically sound, high-performance work environments.

Banking sector leadership

The banking sector plays a significant role within the South African economy. The sector is a critical economic sector that comprises banks that are listed on the Johannesburg Stock Exchange, that is, Barclays Africa/Amalgamated Bank of South Africa (ABSA), Capitec Bank, First Rand Bank, Nedbank, and Standard Bank, which represent 85% of the South African banking sector (Erasmus & Makina, 2014). The banking sector is a catalyst for economic growth, and it facilitates business transactions in the domestic and international economy (Uddin et al., 2021). Furthermore, it provides a safe and effective method of storing individual wealth, providing efficient means of transferring value, making and facilitating market-based decisions, facilitating markets, unlocking wealth, serving as multipliers of wealth, making it possible to participate in the global economy, and is a catalyst for good governance (Douglas, 2008).

The significance of effective leadership with the ability to solve difficulties in the banking sector, which is complex and ever-changing, cannot be underscored (Sylvester, 2024). Effective leaders demonstrate competency in attracting, motivating, and retaining satisfied employees in organisations that are changing and expected to transform and uphold good governance. Asmal and Nosheen (2019) as cited by Motadi (2024) postulate posit that leaders in the banking sector posses specific leadership styles that have a direct influence on the performance of the banks.

In South Africa, it is imperative for leaders in the banking sector to be sensitive to differences that were imposed on South Africans by colonial and apartheid systems (Nkomo, 2017). It must be noted that previous research has neglected specific leadership dynamics in the banking sector, with researchers focusing on general leadership theories in broader African contexts (Motadi, 2024). However, transactional leadership has been researched in the banking sector, and it is viewed as useful because of its focus on stability and emphasis on processes and procedures. Ahmed et al. (2016) postulate that transactional leadership has a direct relation with better business efficiency and promotes adherence to compliance standards in the banking industry. While transactional leadership can keep work behaviours under control and maintain performance levels, it does not lead to as much innovation and flexibility (Bass, 1985; Dong, 2023), and this remains a challenge for the South African banking sector that is diverse and required to transform and is led by leadership that can foster trust and collaboration (Nkomo, 2017). Leaders in the banking sector need leadership styles that empower them to create more diverse and inclusive workplaces and support national economic inclusion and social justice (Mangaliso, 2001; Myeni & Singh, 2024).

Transformation

Transformation means different things for different contexts (Moraka, 2016), and in the context of this study, the phenomenon of transformation involves cultural and power dynamic change after acknowledging the inequalities and injustices which originated from the colonial era and were perpetuated by the South African apartheid government. During the colonial era and apartheid regime, there were deliberate interventions to exclude black people and women from the economic mainstream (Adonis & Silinda, 2021). Therefore, Moraka (2016) presents transformation as a deliberate and intentional social intervention that seeks to address past disadvantages and inequities that are experienced by affected people, and this phenomenon goes beyond race and gender. In this research, transformation includes employment equity, diversity and inclusion, and their description is provided in the following sections.

Employment equity

Employment equity involves the employment and advancement of previously disadvantaged individuals with principles of fairness, redress and promotion of unfair discrimination in an environment where employment policies, procedures, and practices seek to promote equal opportunities for everyone (Bendix, 2010). It intends to encourage equitable representation of people and groups that were historically disadvantaged in employment, particularly black people, women, and persons with disabilities (McGowan & Ng, 2016). According to Lanfranconi et al. (2020), employment equity is needed as social justice in the workplace. Nzima and Duma (2014) further justify employment equity as a necessary intervention to create a workplace that promotes fair labour practices for equal opportunities.

Current racial disparities in the banking sector

In the 2023 report, the South African Commission of Employment Equity (CEE) cites a lack of committed and willing leadership that values the transformation agenda within corporate South Africa. Leadership in corporate South Africa has not prioritised transformation, and a slow pace of transformation has been normalised. The 2023 CEE’s report provides the National Economically Active Population (EAP) statistics that require organisations in South Africa to reflect the national demographics, as presented in Table 1.

TABLE 1: Demographics of the economically active population per population and gender groups at the national level.

In the 2023 CEE Report, Chairperson Ms Nkabinde highlighted a continuation of the slow pace of transformation in the workplace, especially in top and senior levels of management in the private sector. Table 2 contains statistics that reveal under-representation (yellow) and over-representation (red). The difference between black and Africans is explained by the fact that black is a generic word that includes Indian, Coloured, and African people who are South Africans by birth.

TABLE 2: Summary of the demographics in the financial and insurance services sector.

Table 2 presents the statistics as follows:

  • Black people remain under-represented at the top, senior, middle, and junior management levels, and Africans are under-represented at all occupational levels.
  • Black women are under-represented at the top, senior, and middle management levels and over-represented at the junior management occupational level.
  • Generally, women are under-represented at the top and senior management levels and over-represented at the junior management level.
Diversity

Employment equity is legislated by the Employment Equity Act, No. 55 of 1998, in South Africa, and compliance with this law does not translate to managing diversity, as the law unintentionally focuses on race, gender, and disability (Van der Heever et al., 2019). It must be noted that diversity goes beyond race to encompass many seen and unseen human characteristics. Etymologically, diversity refers to differences and varieties, and the management of diversity involves paying attention to respecting people for their multiple differences and similarities. Therefore, diversity must effectively be managed for organisations to take advantage of its benefits (Petts, 2020).

Inclusion

Inclusion is a social justice where everyone, despite differences, feels that they belong (Sapon-Shevin, 2003). When previously excluded groups, along with all employees, are actively included in work activities and decision-making, employees can genuinely feel valued.

Leaders foster inclusion by taking deliberate and endless attempts to create a welcoming and respectful environment and afford a diverse group of people to fully participate in activities of the workplace, and Musonda et al. (2019) postulate that inclusion is a key driver of organisational transformation, and leaders who value transformation demonstrate their commitment by practising inclusion.

Promoting diversity, equity, and inclusion in the workplace is significant for inculcating a culture where employees can feel a sense of belonging and improve their well-being. Jaiswal et al. (2022) argue that diversity correlates significantly with employee well-being and inclusion. This resonates with Paldon et al.’s (2024) assertion that a work environment that values diversity and promotes inclusion, where all employees feel valued and respected, benefits from a happy workforce with low turnover and increased productivity.

Workplace toxicity

A toxic culture is an environment in which conflict and negativity are prevalent because of leadership’s unethical behaviours (Van Rooij & Fine, 2018). Unfortunately, it becomes a way of life, embedded in organisational structures and practices. Where there is toxicity, leaders are not held accountable for breaking their own rules and ill-treating employees and the teams that they manage (Kasalak, 2019). Leaders in a toxic workplace succeed in creating an environment that is abusive and where they instil fear in their subordinates and promote destructive, unethical, and competitive behaviours (Appelbaum & Roy-Girard, 2007; Van Rooij & Fine, 2018).

Data collection

The bank occupies a big market share in South Africa and has its operations globally and in several African states. Additionally, it is one of the biggest employers in the banking sector, with more complex diversity considerations, making this study in this setting relevant.

Purposeful and convenience sampling was used, and this strategy focuses on the availability and willingness of participants to participate, considering the representation of the population, and this was intended to ensure we obtain vital information from people that are directly involved in their organisation (Welman et al., 2005).

Forty-six employees from a major and large bank in South Africa were invited to participate in the study. They were members of the Diversity and Inclusion Forums and came from various management levels in the workforce.

Of the total sample, 23 were males and another 23 were females. Furthermore, senior management comprised 10 participants, and middle management and junior management each had 10 participants. Six participants were employees with disabilities, and five employees were members of the Lesbian, Gay, Bisexual, Transgender, Queer, Intersex and Others (LGBTQI+) community. The remaining five participants were nationals from other countries.

For the semi-structured interviews, a sample of 14 employees, aged between 30 years and 60 years, was initially invited to participate. However, only nine participants provided consent and were available for the interviews. Additionally, while 32 individuals agreed to share personal narratives, only 21 successfully completed them.

The process of primary data collection involves systematically gathering and measuring relevant information to enable researchers to draw informed conclusions (Sutton & Austin, 2015). In this study, two data collection methods were utilised. Firstly, data were obtained through semi-structured interviews, and secondly, through the completion of personal narratives by participants.

All participants provided informed consent before taking part in the study and were later invited to attend a spiritual leadership workshop. The workshop was facilitated by an expert who prepared participants for the discussions. With participants’ permission, the workshop presentation was audio-recorded for research purposes. The recording was strictly for use by the participants and researchers, ensuring compliance with ethical research standards (Kakanda-Sinkala, 2024).

Data saturation

In this study, data saturation was a critical criterion for determining the adequacy of data collection. Data saturation occurs when further data collection and analysis no longer yield new insights, rendering additional data unnecessary (Mwita, 2022). During the analysis of interview transcripts, saturation was achieved by the ninth participant, as no novel themes or perspectives emerged beyond this point. Additionally, the analysis of personal narratives did not contribute further substantive information, confirming that data saturation had been reached.

Interpretive phenomenological analysis

This study adhered to the interpretative phenomenological analysis (IPA) framework as outlined by Noon (2018). The analysis followed a systematic, multi-stage process to ensure rigour, coherence, and fidelity to participants’ lived experiences.

The first stage involved multiple readings of the data, accompanied by extensive note-taking and repeated listening to audio recordings. This process facilitated immersion and familiarisation, enabling a deep engagement with the data while minimising the risk of misrepresentation or distortion of participants’ lived experiences.

The second stage focused on developing emergent themes, wherein the analytical notes were systematically transformed into thematic patterns. Although this phase was labour-intensive and cognitively demanding, it was essential to ensure that emerging themes remained true to participants’ original meanings without researcher-imposed alterations.

In the third stage, the extracted themes were systematically organised and linked to relevant data extracts or direct participant quotations. This step ensured that participants’ personal narratives were preserved, preventing the loss of meaningful insights. Additionally, themes were visually mapped to illustrate their interconnections and their alignment with the research questions.

The fourth stage entailed moving to the next case, where each transcript was analysed independently using the same rigorous approach as in the first stage. This method prevented premature conclusions and minimised potential bias from previous analyses. To maintain analytical integrity, emerging ideas from prior transcripts were bracketed to avoid influencing the interpretation of subsequent data (Smith et al., 2009).

The fifth stage involved constructing a final table of themes and sub-themes, integrating insights from all transcripts. This phase required careful cross-referencing of themes against transcripts and analytical notes to ensure that only the most salient and representative themes were prioritised.

Finally, the sixth stage deepened the interpretative process by engaging in higher-level abstraction and thematic refinement. At this stage, lived experiences were contextualised and detailed, ensuring that participants’ narratives were authentically represented without distortion or misinterpretation.

Ethical considerations

Ethical clearance to conduct this study was obtained from the University of Johannesburg, Department of Industrial Psychology and People Management Research Ethics Committee (IPPM-2022-605[D]). All procedures performed in studies involving human participants were in accordance with the ethical standards of the institutional and/or national research committee and with the 1964 Helsinki Declaration and its later amendments or comparable ethical standards. Written and verbal informed consent was obtained from all individual participants involved in the study.

Results

Eight main themes emerged from the analysis of interviews and personal narratives. Identified through triangulation, these themes are presented in the following sections.

There is toxic culture in the banking sector

First of all, there is the existence of a toxic culture which is accompanied by leadership that is cold and self-serving; top-down decision-making; a lack of psychological safety; and discrimination based on race, disability, and sexual orientation. Eight participants cited toxicity as a daily occurrence in the sector, with nine personal narratives confirming this lived experience.

For example, participant 19 used strong words to emphasise toxicity and said:

‘Corporate is still very hierarchical, patriarchal, and rife with harmful behaviours narcissism and sociopathic behaviours. Often, these negative behaviours are rewarded with career growth.’ (White person, Male, Senior Manager)

Participant 12 also stated that:

‘I was gently and very subtly being nudged out of my current position in our team through some underhanded tactics that I later reflected on, being bad mouthed and my professional reputation tarnished, forced to fend for myself in the workplace…’ (White person, Male, Senior Manager)

Cold leadership is evident from leaders that are self-serving. Participant 9 was serving a termination notice when the interview was conducted. This employee was known for championing transformation in his business, and when asked why he was leaving the bank, he responded with a faint voice and said:

‘I am hopeless, and the bank has failed many people in serving their purpose. We are confined in rigid rules and leadership styles and resigning was a last choice to pursue my life purpose.’ (Black African person, Male, Middle Manager)

Personal narratives corroborated this, with participant 15 saying:

‘Leadership is hierarchical. It is tone-deaf. It is oblivious [frankly does not care] about the human. It re-enforces everything toxic I have been warned about corporate. Personally, as an employee, I have felt foreign in the bank. As a young black queer woman who loves body modification …’ (Black African person, Female, Middle Manager)

Top-down decision-making, which forms part of toxicity, was better summed up by participant 2, who was interviewed after his position was downgraded without him being consulted. During the interview, he stated that he was extremely disappointed and went on to say:

‘We lead transformation, but decisions are top driven, and people have senior positions with no authority and people with different thinking are frustrated.’ (Black African person, Male, Top Manager)

He was one of the most senior leaders in the organisation committed to commitment to transformation.

Participant 20 echoed this sentiment by stating:

‘Shortly after I was appointed to a permanent post, I was quickly reminded by the management in the space that I shall not refer to them on a first name basis, as they are my elders, and made aware that I am a subordinate who shall do as he is told.’ (Coloured person, Female, Middle Manager)

Participant 3 highlighted a lack of psychological safety and was visibly irritated during the interview, with his face showing it. He said:

‘When I joined the bank, I had a culture shock and realised people were living in fear with space not allowing to do what they could do. Micro-management and no recognition were an order of the day.’ (Black African person, Female, Junior Manager)

Participant 15 echoed this by saying the following:

‘I think that there are pockets where FEAR is still used as a threat/tool, but I’m surmising and don’t have evidence, just sometimes what I hear.’ (Black African person, Female, Middle Manager)

Discrimination based on race and sexual orientation was articulated by participant 1, with 25 years of experience in the banking sector. It was clear to the interviewer that the participant was emotional as he related the perception of his alleged discrimination. He stated:

‘I was given an opportunity to act in a more senior role and I was disappointed when the role was given to another external person after my six-month acting in the role. I do not think this had to do with my performance, as I was rated setting example in my performance scorecard and got amazing feedback from the team I lead and other stakeholders. I am a big proponent of racial equity and honestly what is right, but it is just painful sometimes when you see other individuals around you being promoted to roles and you are not, and it is like OK, where is my choice? Is it because I am white?’ (White person, Male, Senior Manager)

This expression came with a voice that showed a deep sense of sadness, disappointment, and feeling of being discriminated against.

There is a lack of opportunities and growth for minorities in the banking sector

A lack of opportunities was the second theme that emerged from data analysis, and the theme had two sub-themes, which are the glass ceiling for women and persons with disabilities. The importance of employees believing that they can access and grow in their organisations cannot be overemphasised.

Participant 7 made the following remarks during the interview:

‘Lack of empowerment and there were no opportunities to practice new knowledge, and decisions are centralised with and poor consultation.’ (Coloured person, Female, Senior Manager)

This notion is supported by participant 3, who had extensive global and local work experience, by saying

‘Look, I have more than 15 years in the bank and prior I was working in Canada and decided to come home. For me to move from one grade to my current grade, it took someone who knew me personally. The movement to a one-level higher grade did not change my life, and I have accepted that I have received a ceiling in my career.’ (Black African person, Female, Junior Manager)

Participant 5 (Black African person, Male, Junior Manager), Participant 6 (Black Indian person, Female, Junior Management) and Participant 8 (Black African person, Male, Senior Manager) also expressed a deep sense of dissatisfaction regarding the glass ceiling that is experienced by women in the banking sector, submitting that women, black women in particular, are not respected and valued, and this translates into a lack of growth.

This was echoed by participant 20, who stated:

‘However, this is on policy, but the practice or real-life experiences are far from this dream. We have seen the elevation of the Indian community taking over the Black Economic Empowerment senior roles, over and above the African black nation.’ (Coloured person, Female, Middle Manager)

Regarding employees with disabilities, participant 4 went on to say:

‘Statistics do not lie, there is no growth and opportunities for employees with disabilities.’ (Black African person, Female, Senior Manager)

Autocratic and transactional leadership styles that are prevalent in the banking sector

The third finding suggests that the autocratic and transactional leadership styles are prevalent in the banking sector. Participant 1 said:

‘We have autocratic sometimes extremely directive and sometimes very instructional as opposed to listening to what individuals need or want fand this is demonstrated in the way that leaders treat people and how approachable they are and how they relate to individuals outside of an environment.’ (White person, Male, Senior Manager)

Participant 2 supported this by stating:

‘There are pockets of transformation/diversity and the fact that we are the best in the sector is an indication that our progress has been slow. However, there is a dominance of autocratic, good talk but values are not lived.’ (Black African person, Male, Top Manager)

Participant 10 also stated:

‘Harsh and expected to be strong, sporadic autocratic, tyrant, fearful, democratic, and engaging. Some areas dominated by white. No authenticity.’ (Indian person, Male, Senior Manager)

Transactional leadership is also dominant in the banking sector. Participant 2 stated:

‘We are still stuck in a transactional leadership and relationship where we will reward you for following rules and meeting the defined standards and of course you will be penalised and sometimes severely for not following the rules.’ (Black African person, Male, Top Manager)

Participant 6 also stated the following:

‘There is no variety and white and Indian people are trusted. There is prevalence of transactional leadership style and no respect for employees, junior staff in particular are not valued. The bank is seen as autocratic, transactional, and looking down on people.’ (Black Indian person, Female, Junior Manager)

Furthermore, participant 8 mentioned that:

‘The bank succeeds because of transactional leadership, and it is never about employees. It is either you toe the line or start counting your days.’ (Black African person, Male, Senior Manager)

There is a lack of appreciation of transformation in the banking sector

A lack of appreciation of transformation as a finding is supported by the banks ‘focus on compliance, disregard for people, and focus on profitability’. Participants cited a lack of appreciation of diversity as part of their lived experience in the banking sector.

The picture painted by participant 10 better described a lack of appreciation of transformation:

‘Currently, I observe ego leadership which seeks to divide and conquer, leadership with no conviction to better an individual. The attitude is generally “get the job done,” failing to do so results in you becoming expendable and sliding down the pecking order – no compassion.’ (Indian person, Male, Senior Manager)

Participant 21 concurs and had a sense of hope by adding the following:

‘It is not about the change required in persons in their leadership approach. Simply put, it is a policy and not a humanistic intervention for leaders and all in the workplace. Although, I must say, it is slowly being introduced in the workplace now, but people still need more deliberate conversations and engagements to understanding both.’ (Coloured person, Male, Middle Manager)

There is a lack of new ways of doing business with where transformation and the inclusion of women can primarily be considered for the purpose of increasing productivity and economic transformation (Musonda et al. 2019). Moyo and Rahan (2006) cast doubt on the fact that valuing transformation will become a reality in banks, especially when self-regulation continues to go unchallenged with stricter laws.

Participants alluded to a focus on compliance and profit in the banking sector in support of the lack of appreciation of diversity.

Participant 13 wrote: ‘Transformation in the bank is legislation driven with so much focus on compliance’. (Indian person, Female, Senior Manager)

Participant 16 wrote:

‘Transformation is a tick box, and employees not allowed to ask difficult questions- Leadership does not seem to understand the bigger picture and disability and gender still a challenge. Communication is top-down and while collaboration is encouraged, it is difficult with leaders preferring to collaborate with people they identify with.’ (Black African person, Male, Junior Manager)

Furthermore, focus on profitability has been cited as another evidence of the lack of appreciation of transformation. Participant 1 stated:

‘I was sitting in a in discussion yesterday in Exco … It is about themselves, it is about money, it is about finance, it is about power, and you could pick that up quite distinctively when you have engagement to certain leaders in the narrative in their discussions or what their focus would be.’ (White person, Male, Senior Manager)

In addition, participant 18 wrote:

‘In my career journey I have seen that profitability, shareholder value and survival are prioritised over caring for people. While leadership have all good intentions and speak the right words, their actions are always driven by bottom line.’ (Black African person, Male, Middle Manager)

Banks’ cultural and organisational values are aligned with components of spiritual leadership

As a finding, it was interesting to note that cultural and organisational values align with the components of spiritual leadership. The four big banks in South Africa have values such as integrity, respect, accountability, being people-centred, and being client-driven. While organisational values align with components of spiritual leadership, participants have reported non-existent spiritual leadership, with few leaders showing up with characteristics of the leadership style.

Nevertheless, participant 5 said;

‘Spiritual leadership is truthful, treating people with respect. Ubuntu, transparency, inclusion and accountable to each other, believing in raising one’s voice, feeling of being heard, challenging.’ (Black African person, Male, Junior Manager)

Participant 11 said:

‘Spiritual leadership can be contagious and leaders who focus on following the right principles in how they conduct their work and set the right example, can have a considerable influence on those they work with. Key characteristics of a spiritual leader include showing compassion, having integrity, demonstrating humility and being transparent. An organisation that drives shared values focused on respect, fairness and making a difference can have a competitive advantage as it can inspire staff to develop a sense of purpose beyond maximising profit.’ (Black African person, Male, Senior Manager)

Banks have explicitly committed to values that align with spiritual leadership. They seem to understand that effective organisations identify and develop a clear, concise, and shared meaning of values, priorities, and direction so that every employee understands and can contribute (Dorkenoo et al., 2015). While there is an alignment, as expressed in strategic documents of the banks, employees do not always experience what is promised in the statement of values.

Participant 10 said:

‘I have been employed for 6 years and never experienced spiritual leadership. I have never connected at a level with any leaders where I felt a higher purpose or beyond self-serving. It has always been a culture strictly focused on work. There is no time for play, love, and compassion. It is cold.’ (Indian person, Male, Senior Manager)

Participant 19 said:

‘One manager that I once worked for once said that when they are confronted with tough economic situations, diversity does not matter. That suggested to me that spiritual leadership has not been considered as one of the competitive advantages for companies let alone been understood and appreciated for the value that it can bring in organisations.’ (White person, Male, Senior Manager)

Spiritual leadership facilitates organisational change and personal development

As a theme that also emerged, spiritual leadership plays a significant role in facilitating organisational change and personal development (Naidoo, 2014). Some of the comments made during the interviews and personal narratives are presented in the following paragraphs, resulting in the emergence of this theme.

Participant 13 wrote:

‘Focus more time on getting to know the people you lead and vice versa. Be vulnerable. Draw from each individual’s strengths first and then understand the development areas and why? The focus on the why will assist to create meaning, purpose, and a sense of belonging. Mindfulness and this will involve listening. Set appropriate time for meaningful conversations with staff and most important is what is done with the information shared and follow through …’ (Indian person, Female, Senior Manager)

Participant 25 also wrote:

‘Currently there is a missing link in understanding the real problems of underperformance and ineffectiveness of the employees that needs to be incorporate the spiritual dimension. The above factors could be applied in the workplace can realise spirituality.’ (Black African person, Male, Middle Manager)

From the earlier-discussed findings, there is an alignment between the existing literature on spiritual leadership and what participants value as crucial factors that need to be considered for organisational change and development.

There are specific facilitators of spiritual leadership in the banking sector

Employees in the banking sector believe that spiritual leadership is needed in the banking sector, and the main factors were identified as crucial for spiritual leadership in the banking sector in South Africa. These factors are respect, psychological safety, trust, care, love, belonging, mindfulness, meaning and purpose, and compassion.

There are benefits of spiritual leadership for leaders and employees in the banking sector

Employees in the banking sector believe that the implementation of spiritual leadership in the sector is beneficial for the sector and its workforce. Benefits for banks are trusted leadership, brand enhancement, productivity, competitive advantage, attraction and retention of talent, and social cohesion. Similarly, benefits for employees are belonging, innovation, well-being, improved quality of life, job satisfaction, motivation, empowerment, engaged workforce and organisational commitment, and citizenship. These benefits are aligned with spiritual leadership.

Discussion and implications

The prevalence of a toxic culture is a barrier to banks’ efforts to transform the work environment to benefit employees and meet regulatory expectations. A negative or toxic culture can breed disengagement, burnout, and even physical and psychological health issues among employees (Rathi & Srivastava, 2024, p. 55). It is not surprising that toxic workplaces experience lost productivity, high employee turnover rates, and decreased organisational performance (George, 2023). Additionally, it is common for toxic cultures to justify barriers to workplace entry and opportunities for the marginalised groups, black women, persons with disabilities and members of LGBTQI+ in particular. Appelbaum and Roy-Girard (2007) argue this justification is symbolic of organisations that have become large, dysfunctional families characterised by unethical behaviours. To this end, there is a need for organisations in the 21st century to adapt to meet the social justice needs of the historically marginalised groups and those who face barriers in accessing work and growth opportunities in training and development opportunities (Knoke & Ishio, 1998).

Autocratic leadership remains prevalent in the banking sector, presenting both challenges and opportunities for organisational transformation. While this leadership style has historically been effective in maximising short-term profitability in highly competitive environments (Jaouadi et al., 2023), its continued dominance is concerning in a context where inclusive leadership and transformation are imperative. Given the pressing need for leadership that fosters diversity, participation, and employee engagement, there is an urgent call to accelerate the adoption of more collaborative and transformational leadership approaches that align with the evolving socio-economic landscape.

Autocratic leadership tends to thrive in hierarchical structures where employees readily accept top-down decision-making, leading to efficient performance in certain organisational settings (De Hoogh et al., 2015). However, this leadership style is characterised by limited consultation, disregard for employees’ perspectives, and resistance to participatory decision-making, making it a significant barrier to transformation (Chukwusa, 2018). In such environments, employees are expected to comply with directives without questioning authority, which can contribute to high turnover rates, dissatisfaction, and disengagement, often manifesting as silent quitting (Jaafar et al., 2021).

Moreover, the psychological impact of autocratic leadership on employees is well documented. Research indicates that this leadership style can erode self-confidence, diminish intrinsic motivation, and ultimately hinder overall performance (Pizzolitto et al., 2023). Therefore, while autocratic leadership may yield short-term efficiency, its long-term implications pose significant risks to organisational sustainability, employee well-being, and transformation efforts within the banking sector.

Transactional leadership is also dominant in the banking sector, primarily because it aligns with the industry’s financially controlled and performance-driven environment. This leadership style has enabled banks to achieve profitability and operational efficiency, often at the expense of employee well-being and workplace transformation (Jaqua & Jaqua, 2021). In highly regulated and target-driven industries like banking, employees tend to accept transactional leadership because it provides clear structures, defined rewards, and performance-based incentives, which are essential in risk-averse and compliance-heavy environments (Bass, 1985).

Northouse (2018) argues that transactional leaders are primarily focused on achieving organisational goals, often neglecting employees’ personal development and long-term engagement. While Ozcan and Ozturk (2020) demonstrate that transactional leadership has a significant positive effect on employee performance, it has also been found to negatively impact motivation and creativity, particularly when employees perceive rewards as rigid or unfair (Veliu et al., 2017). Interestingly, some studies suggest that transactional leadership has no significant effect on employee performance, implying that its effectiveness may depend on contextual factors, such as organisational culture and employee expectations (Jacobsen et al., 2021).

Literature review and participants’ comments provided evidence for the lack of transformation in the banking sector (Ncube, 2023). It is the responsibility of leadership to transform the workplace, and April and Govender (2022) pointed out that leaders who are responsible for transformation are not held accountable. If leaders continue not to pay attention to transformation in the banking sector, not only will the workplace remain untransformed, but it will also not be able to serve its diverse clients and achieve a meaningful financial inclusion for all.

Spiritual leadership can eradicate social ills and dilemmas that exist in modern times (Reave, 2005). This is because variables such as vision, altruistic love, hope or faith, and spiritual well-being play a vital role in creating a favourable condition for organisational performance and success (Frisdiantara & Sahertian, 2012; Fry, 2003). Chang and Arisanti (2022) postulate that spiritual leadership cultivates a workplace culture that values the spiritual well-being of employees. Different studies find a significant positive influence of spiritual leadership through spiritual well-being on life satisfaction, organisational commitment, and performance (Fry et al., 2005).

It is encouraging that the expression of organisational culture and values has recurring connectedness, vision, inclusion, compassion, service, integrity, meaning, support, fairness and acceptance, respect, psychological safety, trust, service, care, and belonging as important drivers for their culture. These are attributes in Fry’s (2003) spiritual leadership, and we can confirm alignment between spiritual leadership and organisational culture and values in the banking sector. Therefore, the implementation of spiritual leadership in the sector can be seamless. What is needed is that leaders ‘adapt’ based on the situation of the organisational culture and employee expectations’ (Jaouadi et al., 2023, p. 513).

Table 3 shows the main attributes of spiritual leadership in the banking sector, which are necessary to enable everyone to realise spiritual well-being where they experience calling and membership in an environment which values transformation. These attributes are vision, altruistic love, hope or faith, spirituality, character strengths, spiritual transcendence strategy, leadership functions and characteristics in the 21st century (such as service, collaboration, accountability, respect for human beings, commitment to human values, and driving business performance), and concepts identified by participants as key concepts of spiritual leadership. All these are interconnected elements that function simultaneously. Implementing spiritual leadership and incorporating these characteristics in the banking sector can lead to organisational transformation and performance.

TABLE 3: Main characteristics of spiritual leadership in the banking sector in South Africa.

Spiritual leadership in the workplace will not only assist leaders and employees to function in caring for the work environment, but it will also ensure that everyone serves beyond self-interests, with organisations deriving enhanced performance from work commitment, motivation, and organisational citizenship behaviours (Bhatti et al., 2023). Equally, spiritual leadership plays a significant role in facilitating organisational transformation. Frisdiantara and Sahertian (2012) confirm this by stating that spiritual leaders empower their employees to be resilient and embrace change with a growth mindset. Spiritual leaders play a pivotal role in fostering an environment of psychological safety where employees can initiate change without fear of punishment when they fail.

Limitations and recommendations

This research employed a qualitative approach, which requires researchers to navigate the balance between capturing nuanced, subjective data and meeting rigorous methodological standards (Berg & Lune, 2012). While qualitative research presents challenges such as complex data collection and analysis, issues of generalisability, difficulties in replicating findings, and potential researcher bias (Mwita, 2022), it remains a valuable method for understanding lived experiences within a specific phenomenon (Ndi et al., 2021). The study adopted a qualitative, interpretative, explorative, and descriptive phenomenological approach within the context of a single banking institution in South Africa with a global presence. Although single-case studies are often criticised for their limited generalisability and potential researcher bias (Yin, 1984), this study ensured rigour and depth by focussing on a large, multinational institution. This approach facilitated a comprehensive exploration of leadership dynamics and transformation within the banking sector, aligning with the study’s objective of gaining a deeper understanding of the phenomenon under investigation.

The study was conducted during the coronavirus disease 2019 (COVID-19) pandemic, which presented difficulties and challenges for researchers, especially with semi-structured interviews that could not be conducted through online platforms. Wanat et al. (2022) caution it is important to ensure that data are collected in a manner that best captures phenomena in real time. Consequently, we were aware of anxieties, scepticism, and frustrations because of forced vaccination and movement restrictions. This is confirmed by Nomali et al. (2023, p. 7), who postulate that ‘COVID-19 has psychological effects on individuals’, and the emotive research topics such as transformation had to be carefully considered.

Banks can transform and enhance performance by incorporating the main characteristics of spiritual leadership, which are inclusive of spirituality character strengths and transcendence, leadership characteristics, and specific facilitators of spiritual leadership when developing training materials for leaders (Benefiel, 2005; Fry et al., 2005). Leadership training focusing on the importance of psychological safety, trust, and belonging is crucial for successful transformed and performing organisations (Jindal et al., 2024). Psychological safety does not only improve employee well-being but also job satisfaction, overall performance, and encourages risk-taking and team collaboration that result in work productivity (Almahri & Wahab, 2023). Similarly, spiritual leadership fosters trust, as when leaders display spiritual behaviours, employees view them as authentic and trustworthy (Maximo et al., 2019).

It is recommended that a quantitative study be conducted not only to assess the link between spiritual leadership and transformation but also to address the question of generalisation of the study. The COVID-19 pandemic affected people mentally and psychologically, and further studies on the topic are necessary to validate these findings.

Conclusion

The study findings have revealed significant challenges that impede employee well-being and transformation in the banking sector. They also reveal that the prevalence of toxicity, autocracy, and a lack of opportunity does not emanate from a lack of documented values but from leaders that do not walk the talk. Spiritual leadership, which is aligned with organisational values, is a needed solution for the workplace that is characterised by increased diversity, globalisation, changing lifestyles, and challenges that are caused by leaders’ unethical behaviours. Importantly, incorporating spirituality, character strengths, leadership functions and characteristics and facilitators of spiritual leadership in leadership development and practices enables organisations not only to transform their workforce but also to realise organisational performance.

Acknowledgements

Acknowledgement to Dr Albert Wort for contributing to conceptualisation, methodology, and ethical clearance. This article is partically based on the author, R.K.’s Master’s dissertation entitled, ‘The development of spiritual leadership towards transformation in the banking sector in South Africa’, towards the degree of PhD in Leadership in the Department of Industrial Psychology and People Management, University of Johannesburg, South Africa with supervisors Lia M. Hewitt and MaryAnne Harrop-Allin.

Competing interests

The authors declare that they have no financial or personal relationships that may have inappropriately influenced them in writing this article.

Authors’ contributions

R.K. was responsible for the research project, gathering of data, data analysis, and writing the report. M.H-A. reviewed the report, made conceptual and methodological contributions, and reviewed and edited the report for submission. L.M.A. supervised the initial research study.

Funding information

This research received no specific grant from any funding agency in the public, commercial, or not-for-profit sectors.

Data availability

The data that support the findings of this study are available from the corresponding author, R.K., upon reasonable request.

Disclaimer

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of any affiliated agency of the authors.

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