How to Protect Confidential Documents for Boards

When they are performing their fiduciary obligations as directors Board members are entrusted with a large amount of confidential information about their companies. Some of this information is important non-public information – the disclosure of which is controlled by corporate policies and law – while other information is, especially in the case of for-profit companies, is highly personal and sensitive. The fact that certain information discussed in boardroom deliberations is both sensitive and significant can create a trust issue in the context of keeping that information safe from leaks.

Leaks can be devastating for an organization and its staff. They not only impact the financial performance of the business, but also the reputation of the individual directors. Depending on the type and circumstances of the leak, directors may be exposed to criminal or civil liability.

It is best to ensure that all signees understand the www.dataroomabout.com/ideals-virtual-data-room-revie nature of information that must remain private and agree to follow these guidelines. This requires identifying the information to be secured and clearly defining any restrictions on disclosure. For instance it could be that the information may only be divulged to the company’s sponsor or other directors.

Additionally, it is important to have a strong and thorough Confidentiality Policy that is made available to all directors (and their sponsors in the case of directors who are constituency) prior to the time they begin their tenure. This will help them understand their responsibilities as directors and create an environment that values confidentiality as a fundamental aspect of director’s responsibilities.