Empowering Women to Lead Cybersecurity: The Effect of Female Executives on Disclosure Sentiment

Abstract

This study investigates the impact of gender diversity (i.e., the presence of female executives on corporate boards) on the sentiment of cybersecurity information disclosure, including its likelihood, magnitude, and tone. We develop a unique dataset providing an extensive view of the development and evolution of cybersecurity‐related disclosure practices among prominent publicly traded US companies over a 19‐year period (2002–2020). We find strong evidence that female executives are more likely to disclose, and they report significantly more cybersecurity‐related information compared to their male counterparts. Additionally, female executives adopt a more conservative, uncertain, and litigious tone in their cybersecurity disclosures than male executives. The results also support the notion of a critical mass of female executives on the board and align with various theories, emphasising the importance of gender diversity in promoting high‐quality cybersecurity disclosure practices within firms. Furthermore, we examine several channels contributing to the heterogeneity of cybersecurity disclosures between female and male executives, and consider the effects of the black swan events (i.e., the financial crisis and the COVID‐19 pandemic).