Cybersecurity Disclosures in the Aerospace and Defense Industry: A Comparative Analysis of AeroVironment and Industry Peers

Cybersecurity has become one of the most important topics for companies in every industry, but especially for those in aerospace and defense. With these companies dealing with highly sensitive, governmental data, cyberattacks can lead to serious consequences. In 2023, the Securities and Exchange Commission (SEC) changed the rules regarding cybersecurity disclosures for public companies. These changes required public companies to disclose material cybersecurity incidents within four days and provide more details on how they manage and oversee cyber risks. This paper focuses on how these changes impacted the 10-K cybersecurity disclosures within the aerospace and defense industry, specifically comparing AeroVironment to other industry leaders. By using the Gunning Fog Index, word counts, and 3+ syllable word counts from 2020–2024 10-K filings, this paper analyzes how the disclosures shifted in length, complexity, and readability. The results showed that, on average, companies in the aerospace and defense industry made their disclosures longer and more complex after the SEC’s regulatory changes. However, AeroVironment did not show significant improvements in any of these areas. These findings highlight the importance of AeroVironment improving its cybersecurity disclosures to stay competitive and maintain transparency with investors.