When they are performing their fiduciary obligations as directors as well as board members, board members are charged with a wealth of confidential information regarding their businesses. Certain of the information falls within the category of important non-public data, which is subject to the law and corporate policies. Other information, especially when it comes to companies that are for-profit are extremely sensitive and private. Certain information discussed in boardroom discussions is important and sensitive that creates a trust issue when it’s time to safeguard that data from leaks.
Leaks can be devastating for the company and its employees. They may not only damage the financial performance of the company, but also the reputation of the directors themselves. Depending on the nature of the leak (and the circumstances surrounding it) they may expose directors to criminal or civil liability.
It is important to ensure that all signees know what information must remain confidential and agree to adhere to these terms. This means identifying the information that needs to be protected and clearly defining the restrictions on disclosure. For instance it could be that the information could only be disclosed to the sponsor of the company or other directors.
It is also crucial to establish a thorough and thorough Confidentiality policy to all directors, or their sponsors when they are directors of the constituency, prior to when they begin their duties. This will ensure that they are aware of their responsibilities and create an environment that encourages adherence to and protection of confidential information as one of the most important aspects of directors’ responsibilities and duties.