When they are performing their fiduciary duties 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 regulated by the law and policies of the company – however, some of it is, especially in the case of for-profit businesses is extremely personal and sensitive. Certain information discussed in boardroom discussions is both sensitive and important and creates a trust issue when it’s time for protecting that data from leaks.
Leaks can be disastrous to any business and those involved. They may not only impact the company’s financial performance, but can also affect the reputation of the individual directors. Depending on the type of the leak (and the circumstances that led to it) they may expose directors to civil or criminal liability.
It is recommended that all signees understand the nature of information that must remain private and agree to adhere to these terms. This includes identifying the information to be secured and clearly defining any restrictions on disclosure. For instance, it may be that the information can only be disclosed to the company’s sponsor or other directors.
In addition, it is important to include a robust and comprehensive Confidentiality Policy which is given 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 in which confidentiality is considered an essential element of director responsibilities.