Banking Governance in Digital Age: Does Cybersecurity Disclosure Matter to Improve Performance?
Main Article Content
Abstract
The rapid digital transformation of the banking industry has increased exposure to digital and cyber risks, requiring stronger governance mechanisms to ensure effective digital risk management and transparency. This study examines the effect of banking governance mechanism namely 1) IT Committee; 2) Board Skill Index and 3) Board Gender Diversity on cybersecurity disclosure, then cybersecurity disclosure on bank performance. Using panel data from banking firms listed on the Indonesia Stock Exchange during 2016–2025, this research applies panel regression analysis to test the proposed relationships. Banking governance is measured by 1) IT Committee; 2) Board Skill Index and 3) Board Gender Diversity which reflecting digital-oriented governance characteristics, while cybersecurity disclosure is assessed using content analysis of annual reports. Bank performance is proxied by Return on Equity. The findings show mixed results between banking governance and cybersecurity disclosure. Cybersecurity disclosure has a positive effect on bank performance.
Downloads
Article Details
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
https://creativecommons.org/licenses/by-sa/4.0/
References
Abrahams, T. O., Ewuga, S. K., Dawodu, S. O., Adegbite, A. O., & Hassan, A. O. (2024). A Review of Cybersecurity Strategies in Modern Organizations: Examining the Evolution and Effectiveness of Cybersecurity. Computer Science & IT Research Journal, Volume 5, Issue 1, January 2024, 1-25. https://doi.org/10.51594/csitrj.v5i1.699
Al-Sartawi, A. M., Sanad, Z., Shehadeh, M., & Binsaddig, R. (2025). Cybersecurity and Banks Performance: Evidence. International Journal of Cyber Criminology Vol 19 Issue 1 January – June 2025, 1 - 18.
Amani, F., Magnan, M., & Moldovan, R. (2025). Cybersecurity Risks and Insidents Disclosure: A Literature Review. Accounting Perspective, Vol.24, No. 3 (2025), 605-667. https://doi.org/10.1111/1911-3838.12411
Bruno, E., Pistolesi, F., & Teti, E. (2025). Cybersecurity policy, ESG and operational risk: A Virtuous relationship to improve banks’ performance. International Review of Economics and Finance 99 (2025) 104053 , 1-13. https://doi.org/10.1016/j.iref.2025.104053
Eggenschwiler, J. (2018). A Typology of Cybersecuirty Governance Models. St Antony's International Review, February 2018, Vol. 13, No. 2, International Relations in a Post-Factual World (February 2018), 67-78.
Elmarzouky, M., Moussa, T., & Allam, A. (2025). Cybersecurity disclosure: board commitment and regulatory impact in the UK. The International Journal of Accounting, 31 Jul 2025. https://doi.org/10.1142/S1094406025420053
Elnahass, M., Ahmed, Y., & Trinh, V. Q. (2025). Empowering Women to Lead Cybersecurity: The Effect of Female Executives on Disclosure Sentiment. International Journal of Finance & Economics, 15 October 2025, 1-27. https://doi.org/10.1002/ijfe.3067
Figuigui, B., & Machrouh, F. (2020). Banking Governance in The Era of Digital Transformation. Journal of Research in Administrative Sciences, Vol.IX, Issue II, 2020, 10-16.
Firoozi, M., & Mohsni, S. (2023). Cybersecurity disclosure in the banking industry: a comparative study . International Journal of Disclosure and Governance, Palgrave Macmillan, Vol.20 (4), 451-477. https://doi.org/10.1057/s41310-023-00190-8
Fischer-Hubner, S., Alcaraz, C., Ferreira, A., Fernandez-Gago, C., Lopez, J., Markatos, E., . . . Akil, M. (2021). Stakeholder perspectives and requirements on cybersecurity in Europe. Journal of Information Security and Applications 61 (2021) 102916, 1-16. https://doi.org/10.1016/j.jisa.2021.102916
Haislip, J. Z., Karim, K. E., Lin, K. J., & Pinsker, R. E. (2020). The Influences of CEO IT Expertise and Board-Level Technology Committees on Form 8-K Disclosure Timeliness Available to Purchase. Journal of Information Systems (2020) 34 (2), 167–185. https://doi.org/10.2308/isys-52530
Haldar, A., Datta, S., & Shah, S. (2020). Tokenism or realism? Gender inclusion in corporate boards. Equality, Diversity and Inclusion: An International Journal Vol. 39 No. 6, 2020, 707-725. https://doi.org/10.1108/EDI-04-2019-0126
Hassan, A. O., Ewuga, S. K., Abdul, A. A., Abrahams, T. O., Oladeinde, M., & Dawodu, S. O. (2024). Cybersecurity in Banking: A Global Perspective With a Focus Nigerian Banking. Computer Science & IT Research Journal, Volume 5, Issue 1, January 2024, 41-59.
Héroux, S., & Fortin, A. (2024). Board of directors’ attributes and aspects of cybersecurity disclosure. Journal of Management and Governance, Vol.28, 359-404. https://doi.org/10.1007/s10997-022-09660-7
Hillman, A. J., Withers, M. C., & Collins, B. J. (2009). Resource Dependence Theory: A Review. Southern Manahement Association (SMA) Volume 35, Issue 6,2009, 1404–1427.
Islam, M. S., Farah, N., & Stafford, T. (2026). Do Women on the Board Mitigate Cybersecurity Risks? Journal of Information Systems, Vol.XX, No.XX, 1-33. http://dx.doi.org/10.2139/ssrn.5126335
Jallali, S., & Zoghlami, F. (2022). Does risk governance mediate the impact of governance and risk management on banks’ performance? Evidence from a selected sample of Islamic banks. Journal of Financial Regulation and Compliance (2022) 30 (4), 439–464. https://doi.org/10.1108/JFRC-04-2021-0037
Kamiya, S., Kang, J.-K., Kim, J., Milidonis, A., & Stulz, R. M. (2021). Risk management, firm reputation, and the impact of successful cyberattacks on target firms. Journal of Financial Economics, 139 (2021), 719-749. https://doi.org/10.1016/j.jfineco.2019.05.019
Kumar, A., Gupta, J., & Das, N. (2022). Revisiting the influence of corporate sustainability practices on corporate financial performance: An evidence from the global energy sector. Business Strategy and the EnvironmentVolume 31, Issue 7, 2022, 3231-3253. https://doi.org/10.1002/bse.3073
Ling, S., Liu, Z. (., & Xia, H. (2025 ). Code, control and cybersecurity: how board IT expertise shapes corporate risk management. Journal of Accounting Literature, September 05, 2025, 1-23. https://doi.org/10.1108/JAL-06-2025-0320
López, F. A., Jara-Sarrúa, L., Morales-Parada, F., & Palos-Sánchez, P. R. (2025). Cybersecurity disclosure in the financial sector: an examination of the influence of incident exposure, governance practices, and regulatory context. Electronic Commerce Research, 31 December 2025, 1-29. https://doi.org/10.1007/s10660-025-10081-5
Malukani, B., Joshi, A., & Ubeja, S. (2024). Corporate Governance in The Digital Age . IUP Journal of Corporate Governance; Hyderabad Vol. 23, Iss. 3, (Jul 2024), 50-58.
Mansour, M., Zureigat, B. N., Alkhlifhalsaeed, A., & Alkhatib, A. (2026). Cybersecurity Disclosure, Board Oversight, and Financial Performance: Evidence from European Banking . Corporate Board: Role, Duties and Composition, 22(1), 2026, 8–22. https://doi.org/10.22495/cbv22i1art1
Moridu, I., Devi, E. K., Susanti, P., & Fatimah, S. (2023). Analysis of the Impact of Changes in Directors, IT Directors, and Risk Management of BSI (BRIS) on Information Technology Performance and Security and Risk Control at one of the BSI Bank Branches in Bandung City. West Science Business and Management, Vol. 1, No. 04, September 2023, 288~295.
Rahayu, I., Kurniawan, S., Imanullah, A., Maulana, Y., Kharisma, S., Afifah, & Dicky, F. (2020). Profil Risiko Sektor Perbankan Tahun 2020 - Direkorat Identifikasi Kerenanan dan Penilaian Risiko Infrastruktur Kritikal Nasional. Depok: Badan Siber dan Sandi Negara.
Seebeck, A., & Vetter, J. (2022). Not Just a Gender Numbers Game: How Board Gender Diversity Affects Corporate Risk Disclosure. Journal of Business Ethics, Vol. 177, No. 2 (May 2022), 395-420. https://doi.org/10.1007/s10551-020-04690-3
Shehadeh, M. (2025 ). Disclosures on digital transformation strategy and financial technology in Jordanian banks: innovations, challenges and opportunities. Journal of Financial Reporting and Accounting, 3 May 2025 , 1-29. https://doi.org/10.1108/JFRA-12-2024-0972
Skinner, C. P. (2019). Bank Disclosure of Cyber Exposure. Iowa Law Review, Vol.105, 2019, 239-281.
Smaili, N., Radu, C., & Khalili, A. (2023). Board effectiveness and cybersecurity disclosure. Journal of Management & Governance, Vol. 27(4), December, 2023, 1049-1071. https://doi.org/10.1007/s10997-022-09637-6
Srinidhi, B., Sun, Y., Zhang, H., & Chen, S. (2020). How do female directors improve board governance? A mechanism based on norm changes. Journal of Contemporary Accounting and Economics 16 (2020) 100181, 1-18. https://doi.org/10.1016/j.jcae.2019.100181
Terjesen, S., Aguilera, R. V., & Lorenz, R. (2015). Legislating a Woman's Seat on the Board: Institutional Factors Driving Gender Quotas for Boards of Directors. Journal of Business Ethics , May 2015, Vol. 128, No. 2 (May 2015), 233-251. https://doi.org/10.1007/s10551-014-2083-1