Board members are entrusted with a wealth of confidential information by their companies in the course of their fiduciary duty as directors. Some of this information falls under the category of important non-public data, which is controlled by laws and corporate policies. Other information, particularly when it comes to companies that are for-profit are extremely sensitive and private. The fact that certain information discussed in boardroom deliberations is both sensitive and material creates a particular trust issue when it comes to protecting the information from leaks.
Leaks can be catastrophic to a business and the people who are affected. It’s possible that leaks will not only hurt the company’s financial performance, but could also damage the reputation of individual directors. Based on the nature of the leak (and the circumstances surrounding it), they may even expose directors to civil or criminal liability.
It is essential to ensure that all signees are aware of the information that must be kept confidential and agree to abide by these conditions. This published here means identifying the particular information to be protected, and clearly defining any restrictions on the disclosure of that information, such as that it is only shared with other directors, or the company’s sponsor.
It is also important to give a comprehensive and comprehensive Confidentiality Policy to all directors, and their sponsors in the case of constituent directors, before they begin serving. This will ensure that they are aware of their responsibilities and create an environment that is supportive of the respect for and protection of confidential information as one of the most fundamental aspects of a director’s responsibility and obligations.