2.1 The Link Between Corporate Governance and Circular Supply Chain Management

The Stewardship Theory reimagines organizational leaders as stewards motivated to advance the collective good of the firm and stakeholders rather than self-interested agents (Chrisman 2019). This perspective emphasises psychological ownership and long-term orientation, whereby leaders prioritise sustainable value creation over personal gain (Keay 2017). Unlike agency theory's assumptions, stewardship theory shows that directors align naturally with the goals of resilience and accountability when supported by appropriate governance structures. This alignment is crucial today, as environmental, social, and governance (ESG) pressures along with environmental risks have redefined corporate purposes. Seun et al. (2024) suggest that evolving corporate governance requires theoretical frameworks that embrace ecological responsibility as a core organizational mission. The Stewardship Theory provides an ideal lens for understanding how governance drives sustainability practices, such as circular supply chain management (CIRSCM), requiring long-term strategy and innovation. Stewardship-oriented governance creates conditions of accountability and trust, in which circular initiatives thrive. Applying stewardship theory to corporate governance offers a framework for examining sustainable transitions, particularly in resource-constrained manufacturing sectors of developing economies. In this context, organisations governed by boards with stewardship orientation are more inclined to integrate sustainability principles into their fundamental operations, thereby cultivating the cultural and strategic conditions essential for CIRSCM. Based on this backdrop, this study hypothesises that:

2.2 The Mediating and Moderating Role of Eco-Innovation Leadership

The Theory of Planned Behaviour (TPB) (Ajzen 1991) asserts that behavioural intentions are derived from attitudes, subjective norms, and perceived control elements that influence environmentally responsive actions through individual belief systems and social influence (Hagger and Hamilton 2025). When integrated with the Stewardship Theory, which emphasises the intrinsic motivation of organizational actors to pursue collective, long-term objectives, TPB offers a behaviourally grounded extension to structurally embedded governance logic. This synthesis provides a dual-level perspective through which the translation of corporate governance (CORPGOV) principles into circular supply chain management (CIRSCM) practices can be understood more comprehensively.

Emerging from this theoretical confluence is the Stewardship-Behavioural Alignment theory (SBAT), a novel framework that amalgamates institutional governance structures, leadership intentionality, and contextual pressures. The SBAT posits that effective circular transformation is not merely a function of governance design, but rather of its alignment with leaders' behavioural orientation towards sustainability. Eco-innovation leadership, characterised by proactive advocacy for ecological values, investment in regenerative technologies, and responsiveness to sustainability drivers, serves as a central mechanism through which governance principles are operationalised in practise. Accordingly, this study hypothesises that:

Furthermore, recent scholarship emphasises that corporate governance, while crucial, does not inherently lead to transformation unless it is activated through leadership that is sensitive to context. Although some studies (e.g., Rashid 2018) have questioned the substantive impact of governance structures, highlighting their occasional symbolic adoption, emerging perspectives (Ledi et al. 2025) affirm the normative potential of governance in shaping ethical conduct and aligning strategies with sustainability goals. However, the effectiveness of such governance in driving sustainability outcomes depends on its alignment with the leadership orientation. Within this evolving discourse, eco-innovation leadership emerges not merely as a behavioural style but also as a contextual amplifier- a force that dynamically influences how corporate governance affects operational sustainability.

Leaders who internalise ecological values and exhibit a forward-looking, innovation-driven mindset can elevate governance frameworks from compliance-focused instruments to engines of systemic circularity. Such leaders foster an organizational climate that is receptive to closed-loop thinking, technological regeneration, and sustainability integration across the supply chain. Drawing on the Stewardship–Behavioural Alignment Theory (SBAT), we conceptualise eco-innovation leadership as a contingent enabler, moderating the CORGOV–CIRSCM relationship by either reinforcing or diminishing its strength based on the depth of ecological commitment and strategic foresight embedded in leadership practices. In firms with pronounced eco-innovation leadership, corporate governance is more likely to translate into actionable circular supply chain strategies. Conversely, well-structured governance may struggle to yield substantive circular outcomes under low levels of eco-innovation leadership. Thus, we posit the following hypothesis:

2.3 Perceived Urgency for Circularity as a Boundary Condition to Eco-Innovation Leadership

Establishing a compelling sense of urgency is fundamental for catalysing meaningful transformation, as Kotter's (1996) seminal change model identifies it as an indispensable first step in navigating systemic transitions (Mitcheltree 2023). In the context of advancing circular supply chain management (CIRSCM), the perceived urgency for circularity, thus, the organizational awareness of escalating ecological constraints and stakeholder pressures functions as a boundary condition that shapes the efficacy of leadership dynamics. Integrating Kotter's urgency logic with the Stewardship–Behavioral Alignment Theory (SBAT) enriches our understanding of this conditionality. This suggests that eco-innovation leadership's moderating role is not fixed but situationally elastic, amplified or muted by the contextual salience of circularity imperatives. Thus, urgency operates as a psychological trigger (Elliott et al. 2024) that mobilises both the intentionality of eco-innovative leaders and the institutional traction of corporate governance, thereby synchronising strategic orientation with operational execution. This layered interaction underscores that the CORPGOV–CIRSCM relationship is not only behaviourally influenced but also contextually bounded by the perceived criticality of sustainability transitions. Based on this backdrop, this study hypothesises that:

3.1 Study Design and Sample

This study empirically evaluates its conceptual model utilising firm-level data from Ghana's manufacturing sector, exemplifying a developing economy in sub-Saharan Africa, where circularity transitions are emerging amidst institutional fragility and infrastructural constraints. A structured questionnaire using a 7-point Likert scale (1 = strongly disagree, 7 = strongly agree) was used to capture respondents' perceptions across four focal constructs: corporate governance, eco-innovation leadership (EIL), circular supply chain management (CIRSCM), and perceived urgency for circularity (PURGENCY). Given the strategic importance of manufacturing in Ghana's industrialisation agenda, this study concentrated on five high-impact subsectors: food and beverages, wood processing, plastics, textiles, and apparel. A theoretically guided purposive sampling strategy was employed to ensure access to knowledgeable informants embedded in the sustainability and supply chain decision-making processes. Consequently, the respondent pool was restricted to top- and middle-level executives (e.g., CEOs, managing directors, operations and supply chain managers, and sustainability officers) with a minimum of 3 years of industry experience. This expert-informant design enhances internal validity by minimising bias from peripheral organizational actors with limited strategic oversight.

Based on Adomako and Nguyen's (2024) estimation, the population of registered manufacturing firms in Ghana was approximately 1000. Following protocols established for research in institutionally complex and data-scarce contexts (e.g., Dankyira et al. 2024), a refined sampling frame was constructed using the Ghana Yellow Pages and validated through direct outreach and sectoral associations. A prescreening audit, guided by Dornyei (2007), excluded firms that were inactive, untraceable, or informally dissolved, which are typical of fragmented business ecosystems in the Global South. This process yielded a functional sampling frame for 535 active firms. Questionnaires were distributed to all participants, generating 415 responses (response rate = 77.6%) within a four-week period. As apparent in Table 1, after rigorous screening for completeness, response quality, and patterned missingness, 34 responses were excluded, resulting in a usable sample of 381 firms, which is well above the minimum sample size required for robust structural equation modelling (SEM) (Jamil et al. 2024). Although non-probabilistic in design, the sampling strategy ensured contextual fit and sectoral relevance, capturing heterogeneity across firms operating in supply chain–intensive industries central to the circular economy discourse. This approach reflects established practices in sustainability and governance research across emerging markets, where firm viability and data integrity often take precedence over statistical randomness (Agbeka et al. 2025; Amankwah et al. 2025). Sectoral breadth, methodological transparency, and expert targeting collectively enhance the analytic generalisability and theoretical applicability of the study's findings, particularly for research on governance-driven circular transitions in resource-constrained economies.

3.2 Measures of the Substantive Constructs

In line with previous research (e.g., Awuah-Gyawu et al. 2024; Malhotra 2023), this study employed survey items derived from existing literature to enhance the reliability and validity of the measurement items. Consistent with Halidu et al. (2025), to ensure contextual relevance, the survey was subjected to pilot testing with six experts from academia and industry. Their feedback was used to modify and refine the questionnaire prior to its final deployment. Measures of CORPGOV were sourced from Wen et al. (2023), Kazemian et al. (2022) and Ali (2018). Additionally, eight question items were selected from Farooque et al. (2022) to assess the CIRSCM. All nine items used to evaluate eco-innovation leadership were adapted from Jun et al. (2021) and Zhang et al. (2020). Finally, five items for the PURGENCY were adapted from Nguyen et al. (2024). Exploratory factor analysis (EFA) was conducted. In accordance with Hutcheson and Sofroniou (1999), who recommended a factor loading of 0.7 or higher, this study excluded items CORP1, CORP2, CORP7, and EIL1, which had factor loadings of 0.599, 0.543, 0.575, and 0.591, respectively, using the maximum likelihood extraction method. These items were not included in the subsequent analyses.

The exclusion of four items from the CORPGOV and EIL constructs, retaining only those with factor loadings ≥ 0.7, was the outcome of a meticulous empirical refinement process aimed at ensuring theoretical precision and psychometric robustness. These items were not excluded due to poor conceptual alignment but rather due to statistical inefficiency (low loadings and cross-loading) tendencies, which could compromise the unidimensionality and internal consistency of the construct (Yau and Lee 2024; Dall Pizzol et al. 2017).

3.3 Analytical Strategy

The analysis utilised a multistage methodology to ensure both statistical rigour and theoretical coherence (Halidu et al., 2025). Initially, descriptive statistics were computed using SPSS 25.0. The skewness and kurtosis of the data indicated a normality range of −1.179 to +1.76, suggesting the data's normality. It is emphasised that skewness and kurtosis should not exceed +2.58. Subsequently, Confirmatory Factor Analysis (CFA) was performed using AMOS 24.0 to assess the measurement model. Given that the scale items were adapted from the established literature, the CFA concentrated on validating the measurement structure through evaluations of construct validity (including convergent and discriminant validity), internal consistency reliability, and factor loadings, thereby ensuring psychometric robustness prior to model testing.

To examine the conceptual model illustrated in Figure 1, this study utilised a hybrid modelling approach. Hierarchical regression was employed to evaluate direct effects across the baseline and fully controlled models, with Model 1 excluding control variables and Model 2 incorporating them. Mediation and moderation hypotheses were tested using Hayes' PROCESS macro (Models 1, 3 and 4), which facilitates conditional process model estimation of indirect and interaction effects. All continuous predictors were mean-centred to minimise multicollinearity and enhance the interpretability of interaction terms following standardised procedures (Hayes 2015, 2012). Concurrently, structural equation modelling (SEM) was adopted to investigate the full structural model. SEM was chosen for its ability to estimate complex, multi-path relationships between latent variables while accounting for measurement errors, thereby providing a unified, theory-driven perspective to simultaneously test both direct and indirect pathways. This integrative approach ensures alignment between statistical modelling and the study's multidimensional theoretical framework. To further guard against multicollinearity, Variance Inflation Factor (VIF) diagnostics were conducted. Multicollinearity was not an issue among the independent variables (CORPGOV: tolerance = 0.896, VIF = 1.012; EIL: tolerance = 0.945, VIF = 1.058; PURGENCY: tolerance = 0.956, VIF = 1.046; FSLACK: tolerance = 0.889, VIF = 1.125).

3.4 Measures of the Substantive Constructs

Table 2 shows the reliability and validity results of the substantive variables.

Corporate governance is conceptualised as a framework encompassing processes and structures designed to control and direct organisations. It comprises a set of regulations that govern the interrelationships between management, shareholders, and stakeholders (Abdullah and Valentine 2009). Contextual, resource availability, and environmental factors influence the adoption and performance of corporate governance (CORPGOV). Wen et al. (2023) found that the adoption and performance outcomes of effective CORPGOV practices, such as the composition of the board of directors, audit systems, financial disclosure, and ownership characteristics, are influenced by strategic orientation. They suggest that firms with a global orientation frequently implement internationally recognised governance practices, drawing insights from successful models across various markets. This approach can foster enhanced levels of transparency, accountability, and ethical conduct within an organisation. While further research is needed to explore how effective CORPGOV practices drive firm performance, particularly the mechanism through which CORPGOV practices impact circular supply chains in an era characterised by globalisation, environmental consciousness, and supply chain disruption.

Circular supply chain management constitutes a transformative operational paradigm that incorporates circular economic principles into the core of supply chain strategy and execution. In contrast to the traditional linear “take-make-dispose” model, the CIRSCM adopts restorative and regenerative system designs aimed at extending product lifecycles, reducing material throughput, and enhancing resource circularity (Figge et al. 2023; Zhang et al. 2021). In response to escalating ecological crises and the intensifying urgency of climate change, Saroha et al. (2018) assert that CIRSCM emerges not merely as an alternative but as an imperative, facilitating systemic reconfiguration whereby materials are perpetually cycled and exhausted only through complete value extraction within supply networks. Firms with a strong environmental orientation are particularly well positioned to lead this transition. Agyabeng-Mensah et al. (2022) contend that such organisations tend to cultivate dynamic capabilities and engage in innovation trajectories that reinforce circularity across supply chain nodes. Fundamentally grounded in the ethos of the circular economy, the architecture of CIRSCM aligns seamlessly with the United Nations Sustainable Development Goals (SDGs), particularly in its promotion of responsible consumption and production patterns. Furthermore, the integration of advanced digital technologies, such as blockchain, the Internet of Things (IoT), and predictive data analytics, is poised to act as a catalyst, operationalising circular principles at scale and enhancing transparency, traceability, and real-time responsiveness in closed-loop supply chains (Azmi et al. 2024).

Eco-innovation leadership embodies a leader's strategic foresight and proactive approach to integrating sustainability into the fundamental framework of organizational value creation. It signifies not only willingness but also readiness to reconceptualise products, processes, and business models from the perspective of circularity, prolonging the functional lifespan of resources while systematically reducing environmental externalities (Zhao et al. 2024; Pichlak and Szromek 2021). Such leadership extends beyond mere compliance or incremental environmental improvements; it represents a transformative force that mobilises organizational ecosystems towards regenerative design principles.

When leaders genuinely advocate eco-innovation, they do more than initiate green transitions; they establish an ethos of collective ecological awareness and institutional accountability. This leadership approach fosters a psychologically empowered workforce that aligns with the organisation's sustainability goals. Employees become not merely task executors, but also co-creators of environmental value, driven by the sense of contributing to a purpose-driven enterprise with tangible impacts on sustainable development. In this context, the leader functions as both an architect and a catalyst, translating circular economy principles into actionable strategies, while fostering a resilient culture of innovation capable of navigating the complexities of the sustainability transition (Mignonac 2008).

Perceived urgency for circularity represents an accelerating cognitive and strategic imperative, characterised by an acute awareness among stakeholders that the transition towards regenerative and restorative business models is no longer deferrable. This urgency arises from a confluence of intensifying ecological thresholds, systemic resource vulnerabilities, and the increasing inadequacy of incremental sustainability approaches to address global environmental challenges (Mitcheltree 2023). Although the circular economy is gaining prominence as a paradigm capable of reconciling economic activity with planetary boundaries, academic discourse has predominantly focused on its technical deployment, consumer adoption patterns, and sectoral innovations, often neglecting time-sensitive drivers that compel its rapid assimilation. The temporal dimension of circularity: ‘the imperative of immediate action’ remains conspicuously undertheorized. As Khan et al. (2022) demonstrate through their extensive review of circular economy practices, the literature tends to articulate what and how, but remains largely silent on when, particularly regarding the necessity of accelerated adoption in the face of escalating environmental instability. Bocken et al. (2016) identified this gap, calling for a more rigorous exploration of the psychological, organizational, and strategic antecedents that inform urgent decision-making in circular transitions. Nevertheless, the field still lacks a cohesive theoretical framework to conceptualise urgency as a stimulant for mobilising rapid system-wide changes. Addressing this omission is critical, not merely to enrich scholarly understanding, but also to align academic inquiry with existential realities confronting contemporary production and consumption systems.

3.5 Covariants

From the resource-based perspective of a firm (Peteraf and Barney 2003), this study incorporates financial slack, managerial experience, and industry type as covariates, acknowledging their significance in facilitating strategic innovation. Financial slack, defined as uncommitted liquid resources, serves as a strategic reserve that supports risk taking, investment in innovation, and adaptive responses to external shocks (Tran et al. 2018). Managerial experience, quantified by tenure in leadership roles, represents accumulated expertise in orchestrating resources, guiding change, and aligning organizational systems for sustainable transformation (Dong 2016; Esposito et al. 2023; Tran et al. 2024). While large firms often leverage abundant resources, smaller enterprises can mitigate such limitations through enhanced strategic flexibility and expedited implementation of circular initiatives facilitated by flatter structures and agile decision-making (Sen et al. 2023). Both variables were included in the model to control for the potential confounding effects. Financial slack was assessed using four items from Tran et al. (2018) on a seven-point Likert scale. Their inclusion enhances the robustness of the analysis and aligns with the RBV's assertion that resource heterogeneity underpins sustained competitive advantage in dynamic sustainability contexts. Finally, industry type is incorporated as a structural control to reflect its influence on firms' resource configurations and absorptive capacities for circular practices. Sectoral variation, represented by industry dummies (1 = food and beverages, 2 = wood processing, 3 = plastics, 4 = textiles, and 5 = apparel), was examined to explain the differences in their ability to translate corporate governance mechanisms into circular supply chain outcomes.

3.6 Common Method Bias

To address common method bias (CMB), both ex ante and ex post strategies were implemented in accordance with the guidelines established by Podsakoff et al. (2003). The participants were assured of complete anonymity and confidentiality, with the data being utilised solely for academic analysis. No personal or organizational identification information was requested. The measurement items, adapted from previously validated studies, were evaluated by six experts from both academia and industry to ensure contextual relevance, clarity, and precision. Furthermore, the respondents' self-assessed interest, knowledge, and confidence in completing the survey were recorded. On a seven-point Likert scale, the mean rating was 6.0, indicating high response quality, with ratings ranging from 4 to 7 (See Table 2).

The results of the exploratory factor analysis (EFA) indicated that the independent variables account for 75.773% of the variance in the dependent variable, as evidenced by eigenvalues exceeding 1.00. Furthermore, Harman's single-factor test revealed that a single factor accounted for only 26.928% of the variance in the dependent variable, which was below the 50% threshold recommended by Podsakoff et al. (2003).

3.7 Validity and Reliability

To ensure the high internal consistency of the measurement items, this study assessed the reliability coefficient of the measures following the methodology of Hair et al. (1998). Table 3 indicates that all substantive constructs exhibit satisfactory cronbach's alpha values, ranging from 0.90 to 0.95, which align with the threshold proposed by Eiras et al. (2014). Convergent and discriminant validity were evaluated to confirm that the measurement items uniquely assessed their respective constructs and were distinct from the other constructs (Krabbe 2016). Table 3 demonstrates that the Average Variance Extracted (AVE) values were satisfactory (Hair Jr et al. 2021). In accordance with Fornell and Larcker (1981), this study established discriminant validity among the constructs (see Table 5). Fornell and Larcker (1981, 91) recommend that: “each construct AVE (squared variance within) should be compared to the squared inter-construct correlation (as a measure of shared variance between constructs) of the same construct and all other reflectively measured constructs in the structural model.” They suggested that the shared variance between all model constructs should be less than their AVEs (see Table 4). A comprehensive confirmatory factor analysis (CFA) estimation of the model was conducted using AMOS version 24 statistical tool (Figure 2). The CFA results indicated a satisfactory model fit with RMSEA = 0.058, NFI = 0.946, TLI = 0.965, CFI = 0.969, RFI = 0.940, Chi-square = 721.732, degree of freedom = 314, and p-value < 0.0001. Previous studies emphasise that RMSEA scores of 0.05 reflect a good fit, while values between 0.06–0.08 indicate a reasonable fit. Furthermore, NFI and TLI values exceeding 0.90 are considered indicative of a favourable fit (Gmel et al. 2019; Park 2021; Liu et al. 2021).

5.1 Theoretical and Managerial Contribution

This study advances the theoretical understanding of CORPGOV-CIRSCM literature by conceptualising eco-innovation leadership (EIL) as both a behavioural conduit and a strategic enabler through which corporate governance is translated into circular supply chain management (CIRSCM). Rather than viewing governance as a static framework of compliance, findings from this study demonstrate that leadership functions as an active mechanism that operationalises governance intent. In practise, robust governance systems are insufficient unless they are complemented by leaders who internalise ecological values and drive innovation with intentionality. Again, to effectively identify and nurture eco-innovation leadership (EIL), organisations must incorporate ecological innovation competencies into their leadership development frameworks and succession-planning strategies. This involves integrating environmental stewardship criteria into executive appraisals and utilising diagnostic tools such as eco-leadership scorecards and sustainability-oriented capability assessments. Talent development programmes should focus on cross-functional circular economy projects, environmental foresight simulations, and experiential learning embedded in real-world sustainability problems. These interventions assist firms in detecting latent leadership capacity and accelerating their eco-innovation readiness. On the policy front, translating perceived urgency into actionable governance changes necessitates formal institutionalisation. Firms can operationalise urgency by embedding sustainability performance metrics directly into board evaluations, introducing environmental risk dashboards that flag early signals of ecological pressure, and tying executive incentives for circularity outcomes. Urgency-to-action protocols, such as mandatory scenario planning or automatic reviews of material flows during environmental disruptions, ensure that governance systems respond adaptively rather than reactively.

Although the effect sizes of EIL's mediation (0.064), moderation at low (0.104), moderate (0.420), and high (0.611), and its urgency-conditioned variation (0.030–0.153) may appear modest, they carry disproportionate practical value. Even marginal improvements in leadership orientation can yield significant gains in translating governance intent into circular outcomes, particularly in resource-constrained economies, where capacity is often limited but responsiveness is high. Sector-specific institutional responses are critical. In industries historically resistant to change, such as wood processing and textiles, regulatory agencies should introduce sector-calibrated incentives, such as green subsidies, material reuse tax breaks, or circular certification schemes, to align private incentives with public sustainability goals. Finally, managerial experience should be evaluated not by tenure alone but by circularity relevance: how closely one's experience aligns with circular economy principles.

5.2 Limitations and Conclusions

While this study presents an integrative behavioural framework for comprehending the interaction of governance, leadership, and contextual urgency in shaping circular supply chain management (CIRSCM), several limitations suggest avenues for further research. First, the data are sourced from an emerging economy context, where institutional logic and cultural interpretations of urgency may differ from those in developed economies. Comparative multi-country studies would enhance generalisability and uncover culturally embedded patterns of stewardship and leadership alignment. Second, although this study advances SBAT, it does not explicitly consider informal power dynamics or resistance to change that may moderate leadership activation. Future research could incorporate political behaviour and psychological safety as additional layers that influence behavioural alignment. Again, future research should employ a mixed method and longitudinal design to enhance causal inference and elucidate deeper behavioural mechanisms. Although this study offers valuable cross-sectional insights, qualitative methods such as interviews or case studies could shed light on leadership enactment and governance translation processes that remain obscured in survey data. Similarly, longitudinal designs are essential for mapping the temporal progression of circular transitions, testing the directionality of governance–leadership–urgency interactions, and capturing how eco-innovation leadership evolves over time in response to changing institutional pressure. In conclusion, this study reconceptualises governance as a behavioural system, not as a static structure, in which circular outcomes emerge only when institutional intent aligns with leadership agency and contextual urgency.