Maryland Board of Directors Confidentiality Policy

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Multi-State
Control #:
US-1060BG
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Word; 
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Description

Board members have limits on how they can share information and with whom they may share it. Maintaining confidentiality means that board members must maintain the confidentiality of any personal or sensitive information they acquire during their service to the board. Board members are in a fiduciary relationship with the corporation. This means that they are obliged to act honestly and in good faith in respect of the corporation. The obligation has many components, including a duty to avoid conflicts of interest and a duty to avoid abusing their position to gain personal benefit. One component of board members' fiduciary obligation is a duty to maintain the confidentiality of information that they acquire by virtue of their position.
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FAQ

Here is what you need to do to protect your business interests. Get a clear picture of the situation. ... Notify the affected parties. ... Implement a containment plan. ... Investigate the cause and review confidentiality policies.

If you believe that there has been a breach of confidentiality, the first step is usually to fully identify and evidence this. You will then usually want to confront the employee about this, explaining that you are aware of a breach, specifically what the breach is and what the consequences of that breach are.

Issue a Letter Addressing the Breach The letter should remind the member of their fiduciary duty and explain in clear terms that they are not allowed to reveal confidential matters. This is otherwise known as a censure. If that does not get their attention, you can follow up with a cease-and-desist letter.

How to Deal with Breach of Confidentiality (5 Steps) Step 1: Investigate and Gather Evidence. Note that the damaged party bears the burden of proof in a confidentiality breach case. ... Step 2: Notify the Breaching Party. ... Step 3: Determine the Damages. ... Step 4: Take Legal Action. ... Step 5: Receive Remedies.

As a board member, you have an obligation to hold in confidence those things that are mutually determined by your fellow board members to be confidential.

Whatever I see or hear of a confidential nature or that is confided to me in my official capacity will be kept ever secret unless revelation is necessary in the performance of my duty.

The policy should include a statement of the directors' duty of confidentiality and explain that they are not to disclose or discuss confidential information about the organization's matters with another person or entity, or use it for their own purposes, unless the board authorizes them to do so.

A board member who reveals confidential information without the approval of the board is, in essence, acting beyond the extent of their authority. Therefore, they can be found personally liable for their actions.

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Maryland Board of Directors Confidentiality Policy