Abstract
This chapter emphasizes the importance of cybersecurity for a corporation as today's organizations are more vulnerable than ever and their enemies are in the form of viruses and malware. The work provides evidence that cybersecurity can have an impact on brand value, market value, and overall corporate reputation. It focuses on depicting the global scenario with reference to cybersecurity disclosures by corporations and how it is important in today's digitized era where data is the most valuable and vulnerable asset. With rapid digitalization, cybersecurity has become a major concern for all businesses, especially when there is financial and reputational damage to cybersecurity breaches and incidents. Even in the absence of clear cybersecurity laws and regulations, corporations are opting for voluntary disclosure. Existing literature explains this as an attempt to mitigate any potential risk or occurred risk through increased transparency which will build the trust of all stakeholders.
TopIntroduction
Digitalisation is not a new word as it has been used for several decades now. “Digitalisation” is the “process of transforming from an analog to a digital format,” which refers to the conversion of analog texts, photos, or sounds into a digital format that can be processed by a computer, according to Gartner's IT Glossary (Blieberger et al. 1996, p. 18). This definition would have sufficed if we were in the early 2000s. Unfortunately, the Covid-19 pandemic of 2020 showed the world the actual definition of digitalisation when that was the only way to survive and thrive. Digitalisation is using digital technologies to change a business model and provide new revenue and value-producing opportunities. It is the process of moving to a digital business (Gartner IT Glossary, 2019).
An online global survey of executives was conducted by Mckinsey (2020). From July 7 to July 31, 2020, a total of 899 C-level executives and senior managers representing a wide range of geographies, industries, firm sizes, and functional specialisations responded to this online survey. From the responses received, it was estimated that adoption of digital technologies by companies for supply chain and customer interaction was accelerated by 3-4 years due to the Covid-19 pandemic. Places like North America took the most significant stride towards digitalisation, with 60% of its products and services now entirely or partially digital.
Digitalisation has not only helped with survival, but it has also enabled opportunities to make businesses better and more efficient. That is why spending $2 trillion by businesses on digital transformation in 2019 does not come as a surprise. At a CAGR (Compound Annual Growth Rate) of 20.9%, it is predicted that the global market for digital transformation will increase from $1.79 trillion in 2022 to $6.78 trillion in 2029 (Fortune Business Insights, 2022). The insane amount of investment makes sense when it directly contributes to the company’s growth. Companies with higher levels of digital maturity reported revenue growth of 45% compared to 15% for companies with lower levels (Deloitte, 2020). 45% of businesses suffering declining revenues as a result of COVID-19 stated they are putting more of a focus on digital transformation (McKinsey, 2020).
Digitalisation is doing wonders for businesses across the globe. Unfortunately, there is no rose without a thorn. Businesses have a sharp and poisonous thorn to deal with before they reap the benefits of digitalisation, that is, cybersecurity risks. Public Safety Canada (2014) defines cybersecurity as “The body of technologies, processes, practices and response and mitigation measures designed to protect networks, computers, programs and data from attack, damage or unauthorised access to ensure confidentiality, integrity, and availability.” According to DHS (2014), it is “The activity or process, ability or capability, or state whereby information and communications systems and the information contained therein are protected from and/or defended against damage, unauthorised use or modification, or exploitation.”
Key Terms in this Chapter
Financial Loss: Loss measured in terms of money and decrease in monetary value.
Malware: Malware is any software that is purposefully created to disrupt a computer, server, client, or computer network, leak confidential information, obtain unauthorised access to data or systems, prevent access to data, or inadvertently compromise a user's privacy and security online.
National Stock Exchange: According to the World Federation of Exchanges(WFE), the National Stock Market (NSE) is the largest stock exchange in India and the fourth largest in the world by volume of equities trading in 2015. The NSE was the first exchange in India to introduce screen-based or electronic trading. It started in 1994.
Bombay Stock Exchange: The Bombay Stock Exchange (BSE), is an Indian stock exchange which is located on Dalal Street in Mumbai, India.
Cybercrime: A criminal activity carried out in order to damage or disable a networked device or network in order to derive monetary gains for cyber criminals, or harm an entity’s ability to earn further.
Market Value: It refers to how much a company or asset is valued by market players on the financial market.
Information Security: The practice of protecting information against unauthorised use and by mitigation of information risk.
Reputational Loss: Damage in opinion or belief about an entity through loss suffered in terms of social identity, financial loss or loss in market share.