How to Protect Confidential Documents for Boards

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As they fulfill their fiduciary duties as directors, board members are entrusted with a lot of confidential information about their businesses. Certain of this information falls within the category of important non-public data, which is controlled by corporate policies and law. Other information, particularly when it comes to companies that are for-profit are highly sensitive and private. The fact that some of the information that is discussed in boardroom discussions is both sensitive and significant raises trust issues when it comes to safeguarding that information from leaks.

Leaks can be catastrophic for an organization and its staff. They are not just able to damage the financial performance of the company, but also the reputation of the individual directors. Based on the nature and circumstances of the leak, directors may be liable to criminal or civil liability.

It is recommended that all signees know the information that must be kept confidential and agree to adhere to these terms. This includes identifying the information that needs to be protected and clearly defining the restrictions on disclosure. For example it could be that the information may only be divulged to the company’s sponsor or other directors.

It is equally important to provide a detailed and robust Confidentiality policy to all directors, or to their sponsors if they are constituent directors, before they are appointed. This will assist them in understanding their responsibilities and help create an environment in which confidentiality is considered an essential aspect of director responsibilities.