IntroductionThe transition to a low-carbon economy has intensified stakeholder pressure on corporations to adopt proactive carbon reduction strategies. However, the internal governance mechanisms that mediate these external pressures remain poorly understood. This study investigates the “governance paradox” in corporate carbon strategy by examining how CEO power moderates the relationship between stakeholder pressures and proactive carbon reduction.MethodsUsing Tobit regression analysis of 3,478 Chinese listed companies from 2008 to 2019—a critical period preceding mandatory “Dual Carbon” policies—we construct a comprehensive framework that systematically measures proactive corporate carbon reduction.ResultsOur findings reveal a fundamental governance tension: while regulatory, media, international, and shareholder pressures significantly drive carbon proactivity, powerful CEOs are associated with a systematic weakening of these positive effects. This resistance manifests through frequent, inefficient strategic changes that disrupt the continuity required for long-term environmental commitment. Notably, international business pressure emerges as the only “hard constraint” that even powerful CEOs cannot effectively dampen, highlighting the critical role of global supply chain demands. The study identifies key mitigating factors: CEOs with environmental expertise significantly enhance carbon proactivity, while independent directors help resolve conflicts between powerful leadership and stakeholder pressures. Our mediation analysis reveals that strategic change serves as a critical transmission mechanism through which CEO-stakeholder conflicts are associated with undermined environmental performance.DiscussionThese findings challenge the conventional wisdom that external pressure alone drives corporate environmental behavior, demonstrating that internal governance structures can create systematic resistance to environmental compliance. The research contributes by unveiling the “black box” of internal decision-making processes and providing actionable insights for policymakers seeking to enhance environmental compliance.
The governance paradox in corporate carbon strategy: CEO power versus stakeholder pressure
Xinyu Wang

