Do Women on the Board Mitigate Cybersecurity Risks?

ABSTRACT We investigate the impact of board gender diversity and the IT expertise of female board members on data breaches. Using data from U.S. firms between 2005 and 2022, we find that gender diverse boards with female IT expertise are significantly less likely to experience data breaches. These results are robust to multiple endogeneity and sensitivity tests. Cross-sectional analysis reveals that the effect is driven by independent female board members, and requires a critical mass of female representation. Furthermore, auditors do not charge increased fees for breached firms when such board structures are present. The channel analysis suggests that gender-diverse boards with female IT expertise enhance cybersecurity investments, thereby mitigating cybersecurity risks. Overall, the findings shed new light regarding the oversight role of boards in cybersecurity risk management. Data Availability: Data are available from the sources identified in the manuscript. JEL Classifications: M2; M1.