When they are performing their fiduciary responsibilities as directors Board members are entrusted with a lot of confidential information regarding their businesses. Certain of the information falls under the category of important non-public data, which is governed by law and corporate policies. Other information, especially in the context of for-profit businesses, is highly sensitive and private. The fact that certain information that is discussed in boardroom discussions is both sensitive and significant is a significant trust issue in the context of protecting the information from leaks.
Leaks can be devastating for a business and the people who are affected. It’s possible that leaks will not only affect the financial performance of a company, but could also damage the reputation of the individual directors. Based on the nature and circumstances of the leak, directors may be liable for criminal or civil liability.
The best way to safeguard confidential documents for boards is to ensure that all signees of the confidentiality agreement understand exactly what information needs to remain confidential, and have agreed to adhere to these terms. This means identifying the information to be secured and clearly defining any restrictions on disclosure. For instance it could be that the information can only be divulged to the company’s sponsor or other directors.
It is also crucial to establish a thorough and complete Confidentiality policy for all directors, or to their sponsors when they are constituency directors, before they start their service. This will allow them to understand their responsibilities as directors and create a culture where confidentiality is viewed as an essential aspect of director’s responsibilities.
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