Priya PatelTLDR:
Companies with advanced cybersecurity performance have a 372% higher shareholder return than those with basic cybersecurity performance. Boards are under pressure to fortify cyber oversight due to the increasing frequency and severity of cyber incidents. Highly regulated industries excel in cybersecurity compared to others. Specialized risk or audit committees enhance cybersecurity performance. Companies with advanced security ratings create nearly four times the amount of value for shareholders as companies with basic security ratings.
Advanced cybersecurity strategies are key to boosting shareholder returns, according to a new report from Diligent and Bitsight. Companies with advanced security ratings see a significantly higher total shareholder return (TSR) compared to those with basic security ratings. The report also highlights that companies with a higher number of independent directors are more likely to have advanced security ratings, and specialized risk or audit committees enhance cybersecurity performance.
In addition, highly regulated industries, such as healthcare and financial services, excel in cybersecurity compared to other sectors. The healthcare sector had the highest average security ratings overall, while the communications sector had the lowest performance rating. The research suggests that market-leading companies prioritize cyber risk management and outperform their peers in terms of financial performance.
Overall, the findings of the report underscore the importance of cybersecurity as a key indicator of financial performance. Companies must treat cybersecurity as a cornerstone of their business strategy and boards are urged to build their competency around cyber risk to protect their organizations’ financial health and reputation.
