2.2.3. Moderation Effect of Board Independence

The board of directors plays a crucial role in corporate governance in terms of management control and oversight of decision-making [50]. The law gives the board formal authority to approve initiatives, evaluate management performance, and control management compensation [51]. Agency theory views monitoring management's actions as the board's primary responsibility to protect shareholder interests. The field of strategy research argues that the composition of the board of directors may impact the outcome of a corporate's strategic choices [52]. As board members, independent directors hold only directorships, and do not have relationships with the company and shareholders that could impede their ability to exercise impartial judgment. Independent directors come from outside the company, have no other interests with the company, and seem to lack the motivation to enhance corporate value. Nonetheless, they do not give in to managers' improper demands to protect their reputations from damage. They can maintain a more independent and objective position in monitoring managers. Independent directors are essential in mitigating conflicts of interest between managers and shareholders and overseeing executives' decisions.

This study argues that board independence can enhance the positive effect of the environmental protection background of executives on green innovation. Independent directors can improve the corporate's internal governance mechanism, including the supervisory and advisory functions. First, in terms of supervisory function, the greater the proportion of independent directors on the board of directors, the more independent directors can play a supervisory role and supervise management on behalf of shareholders [53]. When executives with environmental protection backgrounds make high-risk strategic decisions, such strategic change decisions may not be in the interest of corporate shareholders. Independent directors can identify opportunistic behaviors of executives and can monitor behaviors that are detrimental to corporate performance in the execution of executives' strategies [54]. In addition, independent directors can prevent abuse of power and overinvestment in allocating green innovation resources by executives with environmental protection backgrounds.

Second, in advisory functions, independent directors can provide advice based on their areas of expertise [55]. Independent directors with relevant professional knowledge, experience, and skills can solve problems by grasping corporate strategic decisions and improving motivation for green innovation. They can help executives with environmental protection backgrounds to find the right direction for green innovation, avoiding the risk of "success traps" that executives may overlook due to the risk of green innovation, allowing executives with environmental protection backgrounds to evaluate and make strategic decisions from their viewpoints in a centralized manner, thereby reducing irrational decisions due to the cognitive limitations of managers. In addition, due to the complexity and ambiguity of management practices, independent directors use the degree of strategy implementation as a proxy for management effectiveness [56]. This study argues that the independent board of directors plays a supervisory and advisory role in promoting executives to grasp the timing of green development, thus strengthening the positive relationship

between executives' environmental protection background and green innovation. Thus, the following hypothesis is proposed, and Figure 1 shows the theoretical research model:

**Hypothesis 3.** *Board independence positively moderates the relationship between the executive's environmental protection background and green innovation.*

**Figure 1.** Theoretical research model.
