Board members are entrusted with a wealth of confidential information by their companies in the course of their duties as fiduciary directors. Certain of the information falls under the category of material non-public information, whose disclosure is governed by law and corporate policies. Other information, particularly in the context of for-profit businesses are highly sensitive and private. The fact that some of the information that is discussed in boardroom discussions is both sensitive and important raises trust issues in the context of keeping that information safe from leaks.

Leaks can be catastrophic to a business and the people involved. They may not only affect the company’s financial performance but can also affect the reputation of individual directors. Based on the nature and circumstances of the leak, directors may be liable for criminal or civil liability.

The best method to safeguard confidential documents for boards is to make sure that all signers of the confidentiality agreement understand exactly what information needs to be kept private, and have signed a commitment to adhere to the terms. This means identifying the particular information to be protected, and clearly defining any restrictions on the disclosure of this information, for example, that it can only be published here shared with other directors, or the company’s sponsor.

It is also crucial to provide a detailed and comprehensive Confidentiality Policy to all directors, or to their sponsors when they are directors with constituency status, before they start their service. This will allow them to understand their responsibilities as directors and create an environment where confidentiality is viewed as a fundamental aspect of the director’s duties.