How to Protect Confidential Documents for Boards

Board members are trusted with a great deal of confidential information from their employers as part of their duties as fiduciary directors. Some of this information falls into the category of material non-public information, and its disclosure is controlled by laws and corporate policies. Other information, especially in the context of for-profit businesses, is highly sensitive and private. Some of the information discussed in boardroom discussions is both sensitive and important and creates the possibility of trust issues when it’s time for protecting the information from leaks.

Leaks can be catastrophic for companies and their employees. They are not just able to impact the financial performance of the company and its directors, but also the reputation of the individual directors. Based on the nature and circumstances of the leak, directors may be liable for civil or criminal liability.

The best method to safeguard confidential documents for boards is to ensure that all signers of the confidentiality agreement know what information needs to remain confidential, and that they have signed a commitment to adhere to those conditions. This means identifying the particular information to be protected and clearly defining the limitations on disclosure of that information, such as that it should only be disclosed to other directors or the company’s sponsor.

It is also crucial to provide a detailed and thorough Confidentiality policy to all directors, and their sponsors when they are directors with constituency status, before they are appointed. This will ensure that they are aware of their obligations and help to create an environment that is supportive of the respect for and the protection of confidential information as one of the most fundamental aspects of a director’s responsibilities and duties.

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