Board members are entrusted with a large amount of confidential information by their companies in the course of their duties as fiduciary directors. Certain of this information falls under the category of important non-public information, and its disclosure is controlled by corporate policies and law. Other information, particularly in the case of companies that are not for profit is extremely sensitive and private. Certain information discussed in boardroom discussions is both sensitive and important that creates the possibility of trust issues when it’s time to safeguard that data from leaks.
Leaks can be devastating to businesses and the individuals involved, and may not only impact the company’s financial performance, but can also harm the reputation of individual directors. Depending on the type of the leak (and the circumstances that led to it) they may expose directors to civil or criminal liability.
The best way to secure confidential documents for boards is data room about to make sure that all parties to the confidentiality agreement are aware of the information that must remain confidential, and have agreed to abide by the conditions. This includes identifying the information that needs to be protected and clearly defining the restrictions on disclosure. For example it could be that the information may only be disclosed to the sponsor of the company or other directors.
It is also important to establish a thorough and robust Confidentiality policy to all directors, or their sponsors if they are directors with constituency status, before they are appointed. This will help them understand their responsibilities and help create a culture in which confidentiality is considered an essential element of director responsibilities.