CEO Tenure and Environmental Innovation: The Moderating Role of Governance Quality

ABSTRACT Although environmental innovation is increasingly critical for corporate sustainability, limited attention has been paid to how executive characteristics shape such outcomes. In particular, the long‐term impact of CEO tenure on environmental innovation remains underexplored in the context of governance quality. This study, therefore, aims to examine the impact of CEO tenure on environmental innovation using a panel dataset of 16,596 firm‐year observations from non‐financial firms listed on the Bloomberg World Large and Mid‐Cap Index during 2012–2020. It further examines how corporate governance quality could shape this nexus. Drawing on Upper Echelons, Career Concerns, and Agency theories, we find that CEO tenure is negatively associated with environmental innovation, suggesting that longer‐serving CEOs may exhibit risk aversion or strategic rigidity. The findings also show that high‐quality corporate governance mitigates this adverse effect. These findings offer new insights into the role of executive leadership and internal governance mechanisms in shaping corporate sustainability strategies.