Board members are entrusted with a lot of confidential information from their employers as part of their duties as fiduciary directors. Certain of the information falls into the category of non-public material data, which is governed by law and corporate policies. Other information, particularly in the context for-profit companies are extremely sensitive and private. The fact that some of the information discussed in boardroom deliberations is both sensitive and material can create a trust issue in the context of keeping that information safe from leaks.

Leaks can be catastrophic for companies and their employees. They are not just able to impact the financial performance of the company but also the image of the directors themselves. Based on the nature of the leak (and the circumstances that led to it) they may expose directors to civil or criminal liability.

It is recommended that all signees are aware of Resources https://dataroomabout.com/virtual-data-room-pricing-for-getting-the-best-option/ what information is confidential and agree to adhere to these guidelines. This requires identifying the information to be protected and clearly defining the restrictions on disclosure. For example it could be that the data can only be shared with the company’s sponsor or other directors.

It is equally important to establish a thorough and comprehensive Confidentiality Policy to directors in general, or their sponsors in the case of constituent directors, before they start their service. This will ensure that they are aware of their responsibilities and help to create a culture that values the compliance with and confidentiality of information as one of the most fundamental aspects of a director’s responsibility and duties.