How to Protect Confidential Documents for Boards

In the course of fulfilling the fiduciary duties of directors as well as board members, board members are charged with a wealth of confidential information regarding their businesses. Some of this information falls under the category of non-public material data, whose disclosure is governed by law and corporate policies. Other information, particularly in the context of for-profit businesses, is highly sensitive and private. Certain information discussed in boardroom discussions is important and sensitive that creates a trust issue when it’s time protect that information from leaks.

Leaks can be catastrophic for the company and its employees. They may not only affect the financial performance of the business but also the image of the directors themselves. Depending on the nature of the leak (and the circumstances that lead up to it), they may even expose directors to civil or criminal liability.

The best method to safeguard confidential documents for boards is to make sure that all parties to the confidentiality agreement understand exactly the information that must remain confidential, and have agreed to abide by these terms. This includes identifying the exact information that needs to be protected and clearly defining the limitations regarding the disclosure of that information, such as that it may only be disclosed to other directors or the company’s sponsor.

In addition it is vital to have a strong and detailed Confidentiality Policy that is provided to all directors (and their sponsors in the case of directors who are constituency) prior to the time they begin their tenure. This will allow them to understand their responsibilities and create an environment in which confidentiality is considered a fundamental aspect of the director’s duties.

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