Keeping a company’s information confidential is a part of the fiduciary responsibility of each board member.
Confidential information could be proprietary technology, forward-looking business strategies, or anything that may hamper the company’s ability to do business should it be leaked to competitors or the general public. This confidential information also includes board minutes. Many companies will ask board members to sign a non-disclosure agreement to codify this aspect of a director’s fiduciary responsibility. Still, the duty of care exists whether or not such an agreement is in place.
Board minutes are considered confidential in Canada
Under the Canada Business Corporations Act (CBCA), board meeting minutes are confidential and are only available to the directors and the company’s auditor. There have been successful court challenges that have forced companies to enter portions of their meeting into evidence, but these examples are rare.
The reason is simple – the decisions of the board are public and consequential. However, how they arrived at those decisions may affect the perception of the organization.
For example, when you see a slick marketing campaign, it may have been built on a foundation of quickly jotted notes, last-minute work, and possibly some disagreements between the client and its ad agency.
Good thinking and leadership can sometimes arise out of debates and opposing views, and the final decision is what is put on public display rather than how it was arrived at.
Remember that the idea is not to hide information from shareholders but rather to avoid damaging the company itself in any way. Shareholders can still get all of the information they want and need without having access to board minutes, except in particular cases that your corporate law department can help to mediate.
The line between confidentiality and transparency
In the modern business landscape, investors are more likely to invest in a business that is transparent to its shareholders. Transparency is not about revealing confidential information but going over and above reports to stakeholders to account for board decisions, company financials, and so on.
Transparency is about ensuring that company ownership, executive compensation, and other data points that investors consider essential before making investment decisions are delivered in a clear, transparent manner. This includes not disclosing confidential information that may harm their interests by hurting the company.
The Government of Canada announced an initiative in 2020 to look at changing policy to strengthen Canada’s corporate transparency. While standardizing international rules for corporate transparency is one factor behind the initiative, the main one is making Canadian corporations more attractive to domestic and international investors.
Board portal technology can protect the confidentiality of your meetings and minutes
Despite whether or not board meeting minutes are confidential, they are always better managed through secure Board Portal software than sent by email.
The DiliTrust Governance suite’s Board Portal module makes it easy to assemble, protect, and securely transmit any documents and communications between board members.
Some of the world’s largest corporations, including Burger King and Sodexo, use DiliTrust with full confidence for all their governance needs.
DiliTrust adheres to the highest standards of data security, including:
- ISO 27001 certification, including an archiving and backup policy that preserves data integrity
- Full end-to-end encryption of all data, both at rest and in transit
- Three levels of security control at the server level; for more see our page on security
References
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The Confidentiality of Minutes of Board of Directors Meetings; Vincent Plant, Langlois, July 21, 2016.
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Director’s and Officer’s Duties in Canada; Nicole Kapos, DLA Piper, October 14, 2020.
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Government of Canada strengthening corporate transparency for Canadian businesses; Canada Newswire, Yahoo News, February 13, 2020
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