Citation: Haryanto, Haryanto, Harry Suharman, Poppy Sofia Koeswayo, and Haryono Umar. 2022. Enhancing Employee Engagement in Indonesian Logistics and Forwarders Industry: The Moderating Role of a Democratic Leadership Style. Economies 10: 284. https://doi.org/10.3390/ economies10110284 Academic Editor: ¸ Stefan Cristian Gherghina Received: 4 September 2022 Accepted: 9 November 2022 Published: 15 November 2022 Publisher’s Note: MDPI stays neutral with regard to jurisdictional claims in published maps and institutional affil- iations. Copyright: © 2022 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/ 4.0/). economies Article Enhancing Employee Engagement in Indonesian Logistics and Forwarders Industry: The Moderating Role of a Democratic Leadership Style Haryanto Haryanto 1, * , Harry Suharman 1 , Poppy Sofia Koeswayo 1 and Haryono Umar 2 1 Department of Accounting, Faculty of Economics and Business, Padjadjaran University, Bandung 45363, Indonesia 2 Department of Accounting, Faculty of Economics and Business, Perbanas Institute, Jakarta 12940, Indonesia * Correspondence: haryanto2689@gmail.com or haryanto20001@mail.unpad.ac.id; Tel.: +62-8111517989 Abstract: The quality of employee skills and job commitments, measured based on their retention, is essential in the current rapidly changing technological world. This study aimed to identify the influences of corporate governance (CG), internal control (IC), and corporate reputation (CR) on employee engagement (EE) with democratic leadership style as the moderating variable. Data from 276 companies with 606 respondents were collected using a Google form questionnaire sent to logistics companies that are members of the Indonesian Logistics and Forwarders Association (ILFA) and analyzed using the Partial Least Square–Structural Equation Modeling (PLS–SEM) with the help of SmartPLS 4.0.7.8 software. The results showed that corporate governance, reputation, and internal control positively influence employee engagement. Furthermore, the democratic leadership style does not strengthen the effects of corporate governance, internal control, and corporate reputation on employee engagement. This implies that leaders of the Indonesian logistics and forwarders industry should find a more suitable leadership style for their respective organizations because democratic leadership may not always be the best choice. Keywords: leadership style; corporate governance; internal control; corporate reputation; employee engagement 1. Introduction One of the goals of every company is to maintain business continuity and survival, which requires them to have the resources to adapt to changes in their environment. This means that the quality of employee skills and job commitments, measured based on their retention rates, is essential in the current rapidly changing technological world. In line with this, employee engagement (EE) is reflected in urgency, intensity, focus, enthusiasm, persis- tence, role expansion, and adaptability (Macey et al. 2009). According to lastminute.com (2019), Indonesia is ranked first among the most chilled-out countries. This lastminute rank can lead to an indirect conclusion that Indonesian workers have a lower sense of urgency or work commitment. In addition, based on the record of Indonesia’s Ministry of Manpower, the employee turnover rate in Indonesia is also recorded high. This fact was revealed by Mr. Marajohan, the Head of Infrastructure and IT Security at the Ministry of Manpower, by stating that an unconducive work environment is one of the dominant factors in delivering a high employee turnover rate in the country (Marajohan 2016). Low work commitment and high turnover rate are two main factors which directly relate to employee engagement level. Employee engagement is important in order to provide the best environment, phys- ically and psychologically, while working because it tends to influence the company’s effectiveness and efficiency (Kahn 1990). This raises the question of whether Indonesians Economies 2022, 10, 284. https://doi.org/10.3390/economies10110284 https://www.mdpi.com/journal/economies