She has led New Zealand through the Covid-19 pandemic and a strong economic recovery during her tenure.
She has also laid a solid foundation for the country's future, giving whoever takes over a good chance of success and makes room for a new generation of leaders to rise through the ranks.
Arden stepping down raises a big question though: how do you know when it is the right time to step down as a leader? This comes down to looking past the leader, to see if the team behind them is ready to take up the mantle.
Leaders achieve the majority of their impact by connecting and engaging with others in pursuit of a clear and compelling purpose.
To accomplish this effectively, the leader must have a positive influence on those they lead. When she first entered politics, Ardern had specific values and goals in mind, such as combating child poverty.
These objectives provided her with more clarity and reassurance. Effective leaders instil a sense of security in their teams.
The more information and inspiration a leader can provide their team, the more secure those people will feel and the more capable they will be to use their initiative and make good decisions.
There is a real imperative for leaders who want to build and maintain a positive culture to work hard to inspire and be understood.
Giving people clarity and reassurance about who you are and how you work creates safety and has a positive impact. The better people know and understand you as a leader, the more freedom you will be able to give them and the more initiative they will be able to take.
Allowing people to take initiative contributes to the development of a new generation of leaders. This is exactly what happens in high-performing organisations: leadership flows around and throughout.
Ardern created New Zealand’s most diverse cabinet ever, creating a new generation of leaders.
By creating a team who are motivated and guided by that magically clear and compelling purpose, the result is a creative and exciting culture in which team members are free to harness the energy of others to generate useful activity.
When a leader has a built a legacy and feels that they are no longer able to energise their team and inspire them to help push forward towards that long term goal, it is time to pass on the baton before the momentum they have created is lost.
Though she is stepping down, Ardern can do so with the confidence that she is leaving a solid foundation and a team that will continue to push forward with the purpose that she has instilled in them.
Neil Jurd is the founder of training platform Leader Connect and author of The Leadership Book