ABSTRACT
Based on the results of two experiments with corporate directors, we find that directors perceive an anonymous allegation made by an employee on social media to be as credible and relevant as an anonymous allegation made through an internal whistleblowing channel. However, when additional allegations support an initial allegation, directors perceive greater increases in the credibility of the allegations and increase resources they devote to investigating allegations more when the allegations are made internally versus via social media. Results also indicate that directors perceive that allegations that can trigger restatements are less credible than allegations that could trigger adjustments. However, these threats to director objectivity do not carry over to their decisions to investigate allegations. Directors allocate more resources to the investigation of allegations that trigger restatements, relative to allegations that could trigger adjustments. We find that directors pursue rigorous investigations of allegations, even when investigations create significant personal threats.
