Board members are privy to an immense amount of confidential information as they fulfill their fiduciary duties. This information is often both personal and business-related. It can include sensitive boardroom discussions with corporate executives, strategic initiatives, possible acquisitions, competitive and legal threats, as well as the deliberations of other board members. Contrary to confidential employee data, the disclosure of this type of information to anyone else is not prohibited by law. However, it could violate a director’s fiduciary duties and result in substantial legal liability for both the company and its directors.
The board should formally adopt the policy of confidentiality that covers all the confidential information that it receives and discuss. It should be incorporated into all copies of the board member handbook. The board should demand that all members accept the policy and agree to its rules. The board must make it clear that the policy will apply even after the director’s term ends and that the director who violates the policy will be punished. in breach of the policy and is found to be in violation, he/she will not be able to be a board member again.
The board should limit the number of physical copies and use an online portal for board members with security that is enterprise grade to share sensitive documents. This will ensure that documents are not accessible to anyone who is not authorized and not easily stolen or lost. The platform should permit users to configure printing and downloading rights. It should also feature watermarks with an inscription with a date and time stamp. And it should provide reports detailing who has opened, downloaded or printed the documents.
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