Although the governance principles of many major corporations generally require directors to maintain the confidentiality of board and committee discussions and information, relatively few specifically require them to return or destroy materials provided to them in connection with board and committee meetings.
Particularly in today’s world of virtual meetings, where the documents cannot be physically collected from directors as they leave the boardroom, corporations might consider instituting specific procedures to prevent the unauthorized retention and dissemination of “board books” and related items.
For example, a protected portal operated by the corporation could allow directors to read but not download documents; or, the digital files obtained by directors could be technologically protected against duplication, and coded to “self-destruct” as soon as they have been reviewed.
Directors might even be furnished with (and required to return, upon their departure from the board) specially secured laptops with remotely-erasable drives, to be used, always and only, to prepare for and participate in board and committee meetings.
Of even more concern, however, might be the disposal of any personal notes created by directors during the course of such meetings.
At least two corporations’ governance principles suggest politely that “Directors are discouraged from retaining personal notes made at, or in preparation for, Board meetings, once appropriate review of the minutes of those meetings has been made.”
It might be more appropriate for governance principles to instead require:
(1) that the corporate secretary, or other individual responsible for writing up the minutes of a particular meeting, confirm with the participants, as the last item of business before each meeting is adjourned, the decisions and other commitments made by the board at that meeting, and which, if any, directors dissented or abstained from any votes on them; and
(2) that, as soon as the meeting ends, directors must immediately and completely destroy all personal notes, whether in hard copy or digital form, that they generated in preparation for, or during, the meeting.
Otherwise, board members, especially if they believed that other directors were taking private notes, might decide to protect themselves by making their own records (contemporaneously or retrospectively). More than one of these accounts—which might well conflict with each other—could later surface in media coverage, and possibly as evidence in litigation against the company and/or some of its executives.
Such a “no note-keeping” policy might be most effective if applied by default to all board meetings and all meetings of (at least certain) committees, rather than being adopted “on the fly” just before—or, even more questionably, during—specific meetings or segments of individual meetings, especially one concerning a particularly controversial issue or situation.
In fact, thirteen years ago the Delaware Court of Chancery found it “suspicious” that “No board members were permitted to leave the room with any documents or notes from the meetings discussing the investigation” made by a special committee of the board into allegations of back-dating stock options. Ryan v. Gifford, 2008 WL 43699 (Del. Ch.), at *6 and at *2.
Maybe, as 2021 begins, it would be wise for directors to echo Billie Holiday’s famous declaration of almost eight decades ago: “From now on, I’m travelin’ light. . . . [just] me and my memories.”