How to Protect Confidential Documents for Boards

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Board members are entrusted with a lot of confidential information by their companies in the course of their fiduciary duties as directors. Some of this information is classic private information, the disclosure of which is controlled by laws and company policies and some, particularly in the context of for-profit enterprises is extremely personal and sensitive. The fact that certain information that is discussed during boardroom discussions is both sensitive and significant creates a particular trust issue in the context of keeping that information safe from leaks.

Leaks can be devastating for a company and its people. They can not only harm the financial performance of the business as well as the reputation of the individual directors. Based on the nature and circumstances of the leak, directors may be liable to civil or criminal liability.

It is best to ensure that all signers understand what information is confidential and agree to abide by these guidelines. This involves identifying the information to be protected and clearly defining restrictions on disclosure. For example, it may be that the information can only be shared with the sponsor of the company or other directors.

It is also essential to give a comprehensive and thorough Confidentiality policy to directors in general, or their sponsors if they are directors with constituency status, before they begin serving. This will ensure that they are aware of their obligations and help establish a culture that values the commitment to and security of confidential information as one of the most important aspects of a director’s duties and obligations.