Responsible leadership is crucial for higher education institutions (HEIs) in developing countries to build an institutional reputation by generating advanced knowledge and strengthening socioeconomic development. Drawing on signaling theory, this study investigates the relationship between responsible leadership and academics’ job insecurity, and examines the mediating role of institutional reputation in public and private universities in Bangladesh. The study highlights the differing impacts of responsible leadership on job insecurity in HEIs. Notably, responsible leadership was found to reduce job insecurity in private universities, while it increased in public universities. Institutional reputation, however, played a significant role in mitigating job insecurity in public universities, a trend not observed in private universities. By investigating a model of university responsible leadership on academics’ job insecurity and comparing the public and private sectors in Bangladesh, this study advances our understanding of the complex relationship between responsible leadership and job insecurity in HE within developing countries. Specifically, in a private university, responsible leaders who interact with faculty members in ethical and responsive manners reduce academics’ job insecurity, whereas in public universities, it is only possible by building an institutional reputation. Our findings have important implications for HE leaders who aspire to strengthen the development of HEIs in developing countries and to enhance national well-being and the economy.