In the course of performing their fiduciary duties as directors Board members are entrusted with a great deal of confidential information about their businesses. Some of this information is private information, the disclosure of which is controlled by laws and company policies and some is, especially in the case of businesses that are for profit is extremely sensitive and personal. Some of the information discussed in boardroom discussions is both important and sensitive, which creates an issue of trust when it’s time to protect that information from leaks.

Leaks can be devastating to an organization and the people affected, and they may not only affect the financial performance of the company but can also affect the reputation of the individual directors. Depending on the nature and circumstances of the leak, directors may dealvdr be exposed to civil or criminal liability.

The best method to safeguard confidential documents for boards is to make sure that all parties signing the confidentiality agreement understand exactly the information that must remain confidential, and that they are willing to abide by those conditions. This requires identifying the information to be protected and clearly defining restrictions on disclosure. For example, it may be that the information could only be shared with the sponsor of the company or other directors.

In addition, it is important to include a robust and detailed Confidentiality Policy that is provided to all directors (and their sponsors in the case of constituency directors) before they start serving. This will assist them in understanding their responsibilities, and establish a culture that values confidentiality as an essential element of director responsibilities.