In the course of fulfilling their fiduciary obligations as directors Board members are entrusted with a wealth of confidential information about their businesses. Some of this information is private information, the disclosure of which is controlled by corporate policies and law – while other information is, especially in the case of for-profit businesses, is highly sensitive and personal. Some of the information that is discussed in boardroom discussions is highly sensitive and crucial which can create the possibility of trust issues when it’s time to safeguard that data from leaks.
Leaks can be devastating to a business and the people involved. They may not only affect the company’s financial performance but could also hurt the reputation of individual directors. Based on the nature and circumstances of the leak, directors may be exposed to criminal or civil liability.
The best way to protect confidential documents for boards is to ensure that all parties to the confidentiality agreement understand exactly what information needs to remain confidential, and that they are willing to abide by the conditions. This requires identifying the information that needs to be protected and clearly defining restrictions on disclosure. For instance, it may be that the information may only be disclosed to the sponsor of the company or other directors.
Additionally it is essential to include a thorough and thorough Confidentiality Policy that is distributed to all directors (and their sponsors in the case of directors who are constituency) prior to the time they begin their tenure. This will enable them to comprehend their responsibilities, and establish a culture where confidentiality is viewed as a fundamental aspect of the director’s duties.
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