Abstract

This paper develops and tests a model of fingerpointing behaviors that board members experience because of regulatory reforms. We present the partial results of a large study of 138 board members on 54 publicly traded boards in the United States. We found that recent governance reforms that mandate increased accountability of board members are associated with less board cohesion and thatlower board cohesion is associated with fingerpointing behaviors. These findings suggest that the stages of institutionalization following regulatory shock falter when negative group behaviors develop under scrutiny