Transformational Leadership as a Mediator: Linking Leadership Traits to Organizational Performance in the Libyan Investment Authority

The Libyan Investment Authority (LIA), established in 2006, is significantly hindered in its organizational performance due to ongoing socio-political instability and bureaucratic inefficiencies. This study explores how leadership traits influence performance, particularly within crisis situations, and highlights the crucial role of transformational leadership. A quantitative analysis was conducted using data from 278 staff members through self-administered questionnaires and analyzed with Structural Equation Modeling (PLS-SEM). Key findings indicate that leadership traits specifically knowledge, drive, and honesty have a notable direct impact on organizational performance. Moreover, the relationship between these traits and performance is significantly mediated by transformational leadership behaviors, such as intellectual stimulation and inspirational motivation. This research underscores the importance of focusing on behavioral transformation in leadership development for sovereign wealth funds operating in conflict zones, rather than solely identifying traits conducive to leadership.