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When they are performing their fiduciary duties as directors Board members are entrusted with a lot of confidential information about their companies. Certain of the information falls under the category of material non-public data, which is restricted by corporate policies and law. Other information, especially when it comes to companies that are for-profit are highly sensitive and private. Some of the information discussed during boardroom meetings is both important and sensitive that creates an issue of trust when it’s time for protecting that information from leaks.
Leaks can be devastating to a company and its people. They not only impact the financial performance of the business but also the image of the directors themselves. Based on the nature and circumstances of the leak, directors may be exposed to civil or criminal liability.
It is essential to ensure that all signers understand the nature of information that must remain private and agree to adhere to these terms. This requires identifying the information to be secured and clearly defining any restrictions on disclosure. For example, it may be that the information could only be shared with the company’s sponsor or other directors.
Additionally it is vital to include a thorough and comprehensive Confidentiality Policy which is distributed to all directors (and their sponsors in the case of directors who are constituency) prior to their beginning their service. This will ensure that they are aware of their obligations and create 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.
