Resource Dependency Theory and Cybersecurity Regulation

We explore how cybersecurity should be incorporated into corporate governance and develop specific framework for implementing it. We consider different types of cybersecurity incidents such as ransomware and data leaks, and their impacts on companies. We then discuss how cybersecurity situates in the current corporate governance theoretical framework. Based on the Resource Dependency Theory (RDT), we develop a specific governance framework with a focus on the role of chief cybersecurity officer, the audit committee, the regulatory powers, and market enforcement mechanisms. As more companies are becoming digital native and more services provided are digital in the Web3 space, this chapter is policy relevant as it provides a theoretical basis for implementing cybersecurity within companies in the digital space and a specific framework for the implementation.