Kerry Berchem Discusses the Importance of Boardroom Confidentiality

Boardmember.com featured Akin Gump corporate practice head Kerry Berchem in a Q&A column on the issue of boardroom confidentiality.

When asked why the topic of confidentiality was included in the firm’s previously published “Top 10 Topics for Directors” client alert, Berchem said that, with a greater number of instances of public company directors or former directors talking about each other or company management, “making sure that directors understand the need for confidentiality—and making them accountable for breaches—should be important to companies and their boards now more than ever.”

As for how to deal with a director who does leak information, Berchem stated that, without any written agreement prohibiting such leaks or requiring a board member to resign if confidential information is divulged, the only solution may be “the nominating and governance committee refuses to renominate him or her to the next slate.” In the end, Berchem said, “education and fair warning via a confidentiality agreement should not be viewed as punitive to directors but rather as preemptive measures in their own best interests, as well as the company’s.”