In the course of performing their fiduciary obligations as directors and board members, they are entrusted with a lot of confidential information about their businesses. Some of this information is material non-public information – the disclosure of which is controlled by corporate policies and law – while some of it especially in the context of businesses that are for profit, is highly sensitive and personal. The fact that certain information discussed in boardroom deliberations is both sensitive and important is a significant trust issue in the context of protecting that data from leaks.

Leaks can be devastating for an organization and the people who are affected. It’s possible that leaks will not only hurt the financial performance of a company, but can also affect the reputation of the individual directors. Based on the nature and circumstances of the leak, directors may be subject to civil or criminal liability.

It is best to ensure that all signers understand what information must remain confidential and agree to follow these guidelines. This means identifying the information to be protected and www.dataroomabout.com/the-reality-with-the-data-room-software/ clearly defining restrictions on disclosure. For example, it may be that the information could only be shared with the company’s sponsor or other directors.

It is equally important to present a clear and comprehensive Confidentiality Policy to directors in general, or their sponsors when they are constituency directors, before they begin serving. This will enable them to comprehend their responsibilities and help create a culture that values confidentiality as an essential aspect of the director’s duties.