Public companies with poor cybersecurity underperform in the stock market

Cyberattacks have become a growing threat to the global economy but are still treated by many companies as merely technical issues, according to an article published in CEPR, the Centre for Economic Policy Research. Cybersecurity Ventures estimates that damages from cyberattacks reached as much as $9.5 trillion globally last year.

Companies with greater cybersecurity exposure consistently underperform their peers in the stock market. The financial cost of this underperformance is economically meaningful: for a typical Fortune 500 firm, $87 million in shareholder value is lost due to high cybersecurity exposure.

The persistence of cybersecurity vulnerabilities can be attributed to several factors, including labor shortages. As firms struggle to find the necessary talent to identify and mitigate cybersecurity vulnerabilities, many are left exposed. In fact, experts predict that by 2025 over half of significant cyber incidents will be due to a lack of skilled personnel.

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