Abstract:
Cybersecurity risk governance is an important task for directors and executives in the digital economy era. Whether Directors' and Officers' Liability Insurance (D&O Insurance), as a market-based governance mechanism, can enhance corporate cybersecurity risk governance requires urgent investigation. Based on data from Shanghai and Shenzhen A-share listed companies, this paper empirically examines the impact of D&O Insurance on corporate cybersecurity risk governance. The research finds that D&O Insurance effectively exerts supervisory and incentive effects, enhances corporate attention to cybersecurity risks, attracts directors with information technology backgrounds, promotes information system development and digital technology innovation, and significantly improves corporate cybersecurity risk governance. Heterogeneity tests indicate that the impact of D&O Insurance on corporate cybersecurity risk governance is more significant when insurers have stronger business capabilities and when the insured companies belong to high-tech industries. Further research reveals that D&O Insurance improves corporate resilience and sustainable operational capacity by enhancing cybersecurity risk governance, thereby improving investor protection levels, corporate risk-taking levels, and ESG performance. This paper provides empirical evidence for better understanding the governance functions of D&O Insurance and strengthening corporate cybersecurity risk governance mechanism construction.
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