How to Protect Confidential Documents for Boards of Directors

In the course of performing their fiduciary obligations, board members become privy to a lot of confidential information. This information typically has personal and business implications. This information may include confidential discussions in the boardroom and strategic initiatives, potential acquisitions as well as threats to competition and legal, and the deliberations by other board members. As opposed to confidential employee information the disclosure of this type of information to other people is not a crime under the law; however, it could violate the director’s fiduciary duties and result in substantial legal liability for both the director and the company.

The board should adopt a formal confidentiality policy that covers any confidential information it receives and is discussed. It should be incorporated into all copies of the handbook for board members. The board should demand that all members accept the policy and agree to adhere to its provisions. The board should emphasize that the policy will apply even after the director’s term ends and that if a director is found in breach of the policy then he or she will not be eligible to sit on the board again.

The board should limit the number of physical copies, and use a portal for the board that is equipped with enterprise-grade security to share sensitive documents. This will keep the documents from being accessed by anyone who is not authorized and could be lost or stolen. The platform should permit users to set up print and download rights. It should also provide watermarks that include an inscription with a date and time stamp. Additionally, it should provide reports that detail who has downloaded, opened or printed the documents.