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Board members are trusted with a large amount of confidential information from their companies in the course of their duties as fiduciary directors. Certain of this information falls under the category of important non-public data, whose disclosure is restricted by law and corporate policies. Other information, particularly in the context for-profit companies, is highly sensitive and private. Some of the information discussed in boardroom discussions is both sensitive and important, which creates a trust issue when it’s time protect that data from leaks.
Leaks can be catastrophic for the company and its employees. They not only impact the financial performance of the business and its directors, but also the reputation of directors. Based on the nature and circumstances of the leak, directors could be liable to criminal or civil liability.
The best way to safeguard confidential documents for boards is to ensure that all parties to the confidentiality agreement know what information is required to remain confidential, and have signed a commitment to adhere to the conditions. This includes identifying the exact information to be protected, and clearly defining the restrictions on the disclosure of this information, for example, that it should only be shared with other directors, or the company’s sponsor.
It is also essential to establish a thorough and thorough Confidentiality policy to directors in general, or their sponsors in the case of constituent directors, before they begin serving. This will ensure that they are aware of their obligations and help to create a culture that values the respect for and protection of confidential information as one of the most fundamental aspects of a director’s responsibility and duties.