Corporate Governance, Social Responsibility, and Data Breaches

43 Pages Posted: 3 Apr 2018

See all articles by Claire Lending

Claire Lending

Western Washington University

Kristina Minnick

Bentley University

Patrick J. Schorno


Date Written: May 2018


We study whether corporate governance and social responsibility are related to data breaches. We find that socially responsible companies with smaller boards and greater financial expertise are less likely to be breached. The financial impact of a breach is visible in the long term. Specifically, data‐breach firms have –3.5% one‐year buy‐and‐hold abnormal returns. Additionally, banks with breaches have significant declines in deposits and nonbanks have significant declines in sales in the long run. Finally, we find that following a data breach, companies are more likely to replace their chief executive officer and chief technology officer as well as improve their governance and social responsibility.

Keywords: data breaches, corporate social responsibility, corporate governance

JEL Classification: G3, M14, M15

Suggested Citation

Lending, Claire and Minnick, Kristina and Schorno, Patrick J., Corporate Governance, Social Responsibility, and Data Breaches (May 2018). Financial Review, Vol. 53, Issue 2, pp. 413-455, 2018. Available at SSRN: or

Claire Lending (Contact Author)

Western Washington University

516 High Street
Bellingham, WA 98225
United States

Kristina Minnick

Bentley University ( email )

175 Forest Street
Waltham, MA 02154
United States


Patrick J. Schorno

KPMG, USA ( email )

United States

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