How to Protect Confidential Documents for Boards

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When they are performing the fiduciary duties of directors and board members, they are entrusted with a large amount of confidential information about their businesses. Certain of this information falls under the category of important non-public information, and its disclosure is controlled by corporate policies and law. Other information, particularly in the context for-profit companies is extremely sensitive and private. The fact that certain information discussed in boardroom deliberations is both sensitive and important raises trust issues in the context of protecting that data from leaks.

Leaks can be devastating for the company and its employees. They are not just able to damage the financial performance of the business and its directors, but also the reputation of the individual directors. Depending on the nature and circumstances of the leak, directors could be subject 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 involves identifying the information to be secured and clearly defining any restrictions on disclosure. For example, it may be that the information can only be divulged to the company’s sponsor or other directors.

Additionally, it is important to have a strong and thorough Confidentiality policy that is given to all directors (and their sponsors in the case of constituency directors) before they start serving. This will allow them to understand their responsibilities and help create a culture where confidentiality is viewed as an essential element of the director’s duties.