Previous research has focused on the reaction of stock markets to firms’ environmental fines but has paid a very limited attention to the fines’ implications for subsequent firm environmental performance and internal organization. We contribute to research on learning from organizational failures and to the natural-resource-based view literature by analyzing if environmental fines generate benefits in terms of subsequent environmental performance improvement or changes to the responsible CEOs and directors . We first identified 127 occurrences of US public firms fined over $500,000 in a year between 1993 and 2011. Our sample consisted of 180 observations from 90 fined firms and matching firms without environmental sanctions. The results show that the firms with fines experienced more CEO and director turnover but less environmental performance improvement after the fines relative to their peers.