CORPORATE GOVERNANCE AND GREEN INNOVATION: THE MEDIATING ROLE OF GREEN HRM PRACTICES AND GREEN WORK-LIFE BALANCE

Abstract

Environmental sustainability has emerged as a critical concern for organizations worldwide, prompting increased attention toward internal mechanisms that foster green innovation. Amid growing global and national demands for sustainable development, particularly in developing economies like Pakistan, there is a pressing need to understand how corporate structures and human-centered practices contribute to environmentally responsible outcomes. Despite growing interest in corporate governance and sustainability, limited research has explored the indirect pathways through which governance influences green innovation via organizational practices. This study aims to investigate the relationship between corporate governance and green innovation, with a specific focus on the mediating roles of Green Human Resource Management (GHRM) practices and Green Work-Life Balance (GWB). The research is grounded in the Resource-Based View (RBV) theory, which positions internal capabilities as essential enablers of sustainable competitive advantage. The study utilizes a quantitative, cross-sectional design and collects data from 321 managerial and supervisory-level employees in large manufacturing firms across Pakistan’s environmentally sensitive sectors. Structural Equation Modeling (SEM) using SmartPLS 4 is employed to test the hypothesized relationships. The findings reveal that corporate governance does not have a significant direct impact on green innovation. However, the study confirms a significant and positive indirect relationship through the sequential mediation of GHRM practices and GWB. These results suggest that the influence of governance on innovation is realized when governance mechanisms are translated into employee-centered policies and sustainable organizational culture. The study contributes to the literature by offering an integrated model that highlights the indirect pathways through which internal governance structures influence green innovation. Practically, the findings imply that firms aiming for sustainability must align their governance practices with strategic HR initiatives and supportive work-life policies to foster pro-environmental innovation. This research provides actionable insights for policymakers and managers seeking to embed sustainability within organizational frameworks.

Keywords: Corporate Governance, Green Innovation, Green HRM Practices, Green Work-Life Balance