Law & Business | Professor Bainbridge

Directors Obligations of Confidentiality

Some commentators (most notably Viet Dinh) have sought to exonerate HP director/leaker George Keyworth by arguing that there is "is no general duty of confidentiality for directors." A recent memo from the Fried, Frank law firm, however, lays out the case for director confidentiality as, at the very least, a prudential matter.

Posted on Tuesday, October 03 2006 | Permalink

Interesting related piece in The New Yorker this week on why HP was right to be concerned about the leaks (even if it wasn’t right in the way it stopped them):

http://www.newyorker.com/talk/content

Posted by on 10/03 at 01:43 PM

As one of the less notable commentators rebutting a duty of confidentiality, the comment was not meant to exonerate Keyworth or to suggest that confidentiality was not extremely important to board effectiveness. The point simply was that director confidentiality, desirable as that is, does not rise to the level of a fiduciuary duty, and certainly does not justify the pursuit of leak-hunting by illegal or unethical means.

Posted by on 10/04 at 07:11 AM

This begs the question: what if the leak of confidential information is in the best interests of the corporation? Then it would seem the leak is permitted by the duty of loyalty.

Posted by on 10/04 at 09:55 AM

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