Better Prevention Than Cure: Cybersecurity Risk and Clawback Provision

IF 4.6 3区管理学 Q1 BUSINESS

Corporate Governance-An International Review Pub Date : 2024-05-28 DOI:10.1111/corg.12590

Huy Viet Hoang

{"title":"Better Prevention Than Cure: Cybersecurity Risk and Clawback Provision","authors":"Huy Viet Hoang","doi":"10.1111/corg.12590","DOIUrl":null,"url":null,"abstract":"Research Question/IssueThe escalation of online transactions recently has driven the digitalization trend, which features both emerging opportunities and associated risks, across businesses. This study examines the impact of cybersecurity risk on the adoption of clawback policies among US listed firms during the 2008–2018 period.Research Findings/InsightUsing fixed‐effect estimators, I reveal that clawback adoptions are more likely when cybersecurity risk is on the rise. This effect is transmitted via three channels of multiple business objectives, manager's quiet life, and corporate culture. Furthermore, this effect is diminished among firms with a greater proportion of nonindependent co‐opted directors on board.Theoretical/Academic ImplicationsAlthough clawback policies are often linked to corporate misreporting, this study broadens the conventional research direction by addressing the decision‐making of clawback policy adoption from the data security perspective. The finding of this study implies an extension of clawback endorsement beyond the corporate reporting purpose in the digitalized era.Practical/Policy ImplicationsThis study's findings suggest that firms value the preventive property of clawback policies on corporate misconduct and that firms factor cybersecurity risk into clawback adoption decision‐making. Given that clawback policies extensively tie CEOs' wealth with corporate integrity, early adoptions of this recoupment scheme can be essential to resolving the contemporary cybersecurity problems of the adopted firms.","PeriodicalId":48209,"journal":{"name":"Corporate Governance-An International Review","volume":"24 1","pages":""},"PeriodicalIF":4.6000,"publicationDate":"2024-05-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Corporate Governance-An International Review","FirstCategoryId":"91","ListUrlMain":"https://doi.org/10.1111/corg.12590","RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS","Score":null,"Total":0}

引用次数: 0

Abstract

Research Question/IssueThe escalation of online transactions recently has driven the digitalization trend, which features both emerging opportunities and associated risks, across businesses. This study examines the impact of cybersecurity risk on the adoption of clawback policies among US listed firms during the 2008–2018 period.Research Findings/InsightUsing fixed‐effect estimators, I reveal that clawback adoptions are more likely when cybersecurity risk is on the rise. This effect is transmitted via three channels of multiple business objectives, manager's quiet life, and corporate culture. Furthermore, this effect is diminished among firms with a greater proportion of nonindependent co‐opted directors on board.Theoretical/Academic ImplicationsAlthough clawback policies are often linked to corporate misreporting, this study broadens the conventional research direction by addressing the decision‐making of clawback policy adoption from the data security perspective. The finding of this study implies an extension of clawback endorsement beyond the corporate reporting purpose in the digitalized era.Practical/Policy ImplicationsThis study's findings suggest that firms value the preventive property of clawback policies on corporate misconduct and that firms factor cybersecurity risk into clawback adoption decision‐making. Given that clawback policies extensively tie CEOs' wealth with corporate integrity, early adoptions of this recoupment scheme can be essential to resolving the contemporary cybersecurity problems of the adopted firms.

查看原文本刊更多论文

预防胜于治疗：网络安全风险与退订条款

研究问题/议题近来，在线交易的升级推动了数字化趋势的发展，这既为各行各业带来了新的机遇，也带来了相关风险。本研究探讨了 2008-2018 年间网络安全风险对美国上市公司采用回拨政策的影响。研究结果/启示笔者利用固定效应估计器揭示，当网络安全风险上升时，采用回拨政策的可能性更大。这种效应通过多重商业目标、经理人的平静生活和企业文化三个渠道传递。此外，这种效应在董事会中非独立增选董事比例较高的公司中有所减弱。理论/学术启示虽然回拨政策通常与公司虚假报告有关，但本研究拓宽了传统的研究方向，从数据安全的角度探讨了回拨政策采用的决策问题。实践/政策含义本研究的发现表明，企业重视退还政策对企业不当行为的预防作用，并且企业在采用退还政策的决策中考虑了网络安全风险。鉴于回拨政策将首席执行官的财富与企业诚信广泛联系在一起，尽早采用这种补偿方案对于解决被采用企业的当代网络安全问题至关重要。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

求助全文

约1分钟内获得全文求助全文

来源期刊

Corporate Governance-An International Review Multiple-

CiteScore

7.00

自引率

11.30%

发文量

期刊介绍： The mission of Corporate Governance: An International Review is to publish cutting-edge international business research on the phenomena of comparative corporate governance throughout the global economy. Our ultimate goal is a rigorous and relevant global theory of corporate governance. We define corporate governance broadly as the exercise of power over corporate entities so as to increase the value provided to the organization"s various stakeholders, as well as making those stakeholders accountable for acting responsibly with regard to the protection, generation, and distribution of wealth invested in the firm. Because of this broad conceptualization, a wide variety of academic disciplines can contribute to our understanding.