In the course of fulfilling their fiduciary duties as directors, board members are entrusted with a lot of confidential information about their companies. Some of this information is classic material non-public information – the disclosure of which is restricted by the law and policies of the company – while other information, particularly in the context of businesses that are for profit, is highly personal and sensitive. The fact that some of the information that is discussed during boardroom discussions is both sensitive and significant is a significant trust issue when it comes to keeping that information safe from leaks.
Leaks can be devastating for companies and their employees. They may not only impact the financial performance of the business but also the image of directors. Depending on the type of the leak (and the circumstances surrounding it) they may expose directors to criminal or civil liability.
It is best to ensure that all signees understand the information that must be kept confidential and agree to abide by these conditions. This involves identifying the information that needs to be protected and clearly defining the restrictions on disclosure. For instance, it may be that the information could only be disclosed to the sponsor of the company or other directors.
It is also important to give a comprehensive and robust Confidentiality policy to all directors, and their sponsors if they are constituency directors, before they are appointed. This will allow them to understand their responsibilities, and establish an environment in which confidentiality is considered a fundamental aspect of director responsibilities.