Board members are entrusted with a wealth of confidential information www.dataroomabout.com/advantages-of-having-a-virtual-data-room/ by their companies in the course of their fiduciary duties as directors. Some of this information falls within the category of non-public material data, which is governed by law and corporate policies. Other information, especially in the context of for-profit businesses is extremely sensitive and private. The fact that certain information discussed in boardroom deliberations is both sensitive and material creates a particular trust issue when it comes to safeguarding that information from leaks.

Leaks can be devastating to any business and those who are affected. It’s possible that leaks will not only affect the company’s financial performance, but can also harm the reputation of individual directors. Depending on the type and circumstances of the leak, directors may be subject to criminal or civil liability.

It is recommended that all signers understand the information that must be kept confidential and that they agree to these guidelines. This means identifying the information to be protected and clearly defining the restrictions on disclosure. For instance it could be that the data can only be disclosed to the company’s sponsor or other directors.

In addition it is crucial to have a strong and thorough Confidentiality policy that is distributed to all directors (and their sponsors in the case of directors who are constituency) before they are appointed. This will ensure that they are aware of their responsibilities and will help create an environment that encourages commitment to and confidentiality of information as one of the most important aspects of a director’s duties and obligations.