Board members are entrusted with a great deal of confidential information by their employers as part of their fiduciary responsibilities as directors. Certain of this information falls into the category of non-public material data, which is controlled by law and corporate policies. Other information, particularly when it comes to companies that are for-profit, is highly sensitive and private. Certain information discussed during boardroom discussions is both sensitive and important, which creates an issue of trust when it’s time to safeguard that information from leaks.
Leaks can be devastating for businesses and the individuals who are affected. It’s possible that leaks will not just affect the company’s financial performance, but could also hurt the reputation of the individual directors. Based on the nature of the leak (and the circumstances that lead up to it), they may even expose directors to civil or criminal liability.
It is essential to ensure that all signees understand what information must remain confidential and that they agree to these terms. This means identifying the information that needs to be protected and clearly defining the restrictions on disclosure. For instance check it could be that the data can only be disclosed to the company’s sponsor or other directors.
It is also crucial to present a clear and thorough Confidentiality policy to directors in general, or their sponsors in the case of directors with constituency status, before they begin their duties. This will enable them to comprehend their responsibilities and help create an environment that values confidentiality as a fundamental aspect of director responsibilities.