DOI: 10.12688/f1000research.186795.2 ISSN: 2046-1402

Cybersecurity Disclosure and Financial Performance: The Moderating Role of Board Characteristics

Abdulateif A. Almulhim, Badriah Busaal
Show PDF Cite
Background Cybersecurity has become a strategic governance issue that affects firms’ financial performance and long-term resilience. While cybersecurity disclosure may enhance stakeholder confidence by improving transparency, limited evidence exists on whether board characteristics influence the relationship between cybersecurity disclosure and financial performance. This study examines the impact of cybersecurity disclosure on firm financial performance and investigates the moderating roles of board gender diversity and technological expertise in the Saudi Arabian context. Methods The study uses an unbalanced panel of 155 non-financial firms listed on the Saudi Exchange (Tadawul) over the period 2020–2024. Pooled ordinary least squares (OLS) regression is employed as the baseline estimation method, while System Generalized Method of Moments (System GMM) is used to address potential endogeneity concerns. Additional robustness analyses are conducted using alternative measures of cybersecurity disclosure and financial performance. Results The findings indicate that cybersecurity disclosure is positively associated with firm financial performance, suggesting that greater transparency regarding cybersecurity practices contributes to improved organizational outcomes. In contrast, cybersecurity incident disclosure is negatively associated with financial performance, reflecting the adverse consequences of reported cyber incidents. Furthermore, board gender diversity and board technological expertise significantly strengthen the positive relationship between cybersecurity disclosure and financial performance. The results remain robust across alternative model specifications, disclosure measures, and dynamic estimation techniques. Conclusions The findings demonstrate that the financial benefits of cybersecurity disclosure depend not only on the extent of disclosure but also on the quality of corporate governance. Boards with greater gender diversity and technological expertise enhance firms’ ability to translate cybersecurity transparency into superior financial performance. These findings provide practical implications for regulators, corporate boards, and policymakers seeking to strengthen cybersecurity governance, improve disclosure practices, and enhance organizational resilience in support of Saudi Vision 2030.

More from our Archive