In the course of fulfilling the duties of a fiduciary board members are exposed to a lot of confidential information. This information is often both personal and business-related. This information may include confidential discussions in the boardroom as well as strategic initiatives, potential acquisitions, legal and competitive threats and the decisions of other board members. As opposed to confidential employee information the disclosure of this type of information to anyone else is not a crime under the law, but it can violate the director’s fiduciary duties and result in significant legal liability for the directors and the company.
The board should officially adopt the policy of confidentiality that covers all the confidential information that it receives and discuss. The policy should be included in the members’ handbook. The board should insist that all members sign the policy and agree to adhere to its provisions. The board should state that the policy applies even after the director’s term has ended and that if the director is found to have violated the policy then they will not be eligible to serve on the board in the future.
The board should limit the number of physical copies. They should also use an online portal for board members with security that is enterprise grade to share sensitive documents. This will ensure that the information is not accessible to unauthorized people and is not easily stolen or lost. In the ideal scenario, the platform will allow users to set print and download rights, watermarks that include a date and time stamp and reports that give an overview of who opened the documents, printed them or downloaded them.