Fiduciary duties alone should be sufficient to avoid confidentiality issues, but there are several reasons for the introduction of a formal policy. A privacy directive clarifies the expectations of board members and explains the context of their application. Such a policy could serve as the basis for more detailed procedures when necessary and could govern future decisions or actions. If these reasons are not good enough, a privacy directive is one of the best practices for boards of directors. A breach of confidentiality can be motivated by a number of reasons. Three of the most common are the disclosure of confidential information discussed at a board meeting, the disclosure of personal data and conflicts of interest. The Secretary of the Board of Directors should contain information about the privacy policy during the orientation of the board member and ask the new members of the Board of Directors to sign a statement stating that they have read it and agreed to comply with it. This standard is inherent in the duty of confidentiality: like their for-profit colleagues, members of the board of directors of a not-for-profit corporation are in a fiduciary relationship with the company [and] must act honestly and in good faith…. The obligation has many components, including the obligation to avoid conflicts of interest, and the obligation to abuse one`s position for personal benefits. Part of the directors` fiduciary duty is the obligation to maintain the confidentiality of the information they acquire because of their status. Members of a not-for-profit board of directors are required to keep privately certain information they learn through the board of directors. The legal obligation exists even in the absence of an explicit privacy policy, which has been adopted in writing and formally.

Each state takes its own language of specific business code that spells out the legal obligations of nonprofit business leaders, but in the United States, the general standard follows a long-standing common law tradition: dual duties of care and loyalty. The description of the California NonProfit Public Benefit Corporation Law is a little longer; Nevertheless, this goes back to these well-established fiduciary concepts: confidentiality also means that board members must respect the confidentiality of any personal or sensitive information they acquire while serving on the Board of Directors. A breach of confidentiality can be motivated by a number of reasons. During the Board of Directors, members may have access to personal information or sensitive documents about board members, donors and supporters, membership in the organization in general, and charitable beneficiaries. This can happen in discussions about people`s health, employment or finances, or taking into account potential conflicts of interest. While a board member`s general awareness of fiduciary responsibilities – in a perfect world – would be sufficient to avoid problems, there are several good reasons to take the time and effort to draft and adopt a separate and written strategy document.