IMPACT ON EMPLOYEES’ GOOD GOVERNANCE CHARACTERISRTICS, THE ROLE OF TRANSFORMATIONAL LEADERSHIP AS DETERMINANT FACTOR 1 Mohd Hamran Mohamad, 2 Zulkiflee Daud and 3 Khulida Kirana Yahya College of Business, Universiti Utara Malaysia, 06000, Sintok, Kedah Darul Aman Emails: 1 s93689@student.uum.edu.my (Corresponding Author), 2 zulkiflee@uum.edu.my, 3 khulida@uum.edu.my Abstract: In today’s high expectation and more educated civil society especially who live in the urban area, the effective service delivery system is important to be performed by the public sector organizations through good governance. In human resource perspective, the employees are considered to be the source of good governance success. They are the front- line to realize the successful government service delivered to the public. However, their failures to meet the public needs and expectation lead to various negative complaints given by the public. Indirectly, this scenario indicates poor governance practiced within the public sector organizations. Hence, it is very important for public sector organizations to promote and acculturate the good governance among their employees in order to stay competent of the services delivered. Transformational leadership is found as possible leadership style determinant which is influential in guiding and developing good governance practiced by the employees. The purpose of this paper is to analyze the links between transformational leadership style and employees’ good governance characteristics. This analysis is significant to strengthen the governance of Malaysian local government authorities (LGAs). It reviews the past studies on the mentioned variables and provides some clarification to the nature of relationship existing between them which become applicable references for the study in public sector context. Keywords: Transformational Leadership, Good Governance, Public Sector and Local Government Authorities. 1. INTRODUCTION In increasingly public expectation and more educated societies, Malaysian public sector organizations recognize that they have to improve and strengthen the values of good governance regularly in order to perform their excellent service delivery for a long period of time (MohdSidek, 2007; Siddiquee, 2009). Currently, good governance play a vital role in the formation of public confidence and trust on public sector organizations and viewed as the main principle that attracts private sector investments for the intense economic growth in the country (Badawi, 2005; Rachagan, 2010). Thus, the needs to the valuable elements of good International Journal of Science, Environment ISSN 2278-3687 (O) and Technology, Vol. 3, No 1, 2014, 320 – 338 Received Jan 7, 2014 * Published February 2, 2014 * www.ijset.net