Board members are trusted with a lot of confidential information by their companies in the course of their fiduciary responsibilities as directors. Certain of the information falls into the category of important non-public information, whose disclosure is controlled by law and corporate policies. Other information, particularly when it comes to companies that are for-profit are highly sensitive and private. The fact that certain information that is discussed in boardroom discussions is both sensitive and significant is a significant trust issue when it comes to safeguarding that information from leaks.
Leaks can be devastating for any business and those involved. They may not only affect the company’s financial performance but can also harm the reputation of individual directors. Depending on the type and circumstances of the leak, directors could be subject to civil or criminal liability.
It is recommended that all signers understand the information that must be kept confidential and agree to abide by these terms. This means identifying the particular information that must be protected and clearly defining the restrictions regarding the disclosure of that information, such as that it should only be shared with other directors or the company’s sponsor.
It is also essential to establish a thorough and robust Confidentiality policy to all directors, or to their sponsors in the case of constituency directors, before they begin serving. This will ensure that they are aware of their obligations and create an environment that encourages compliance with and confidentiality of information as one of the most fundamental aspects of a director’s responsibility and obligations.