Board member source of leak, not faucet!

L.R. Writes:

Dear Paul: Each of our board members has signed a “Confidentiality Agreement” stating – “We do hereby affirm confidentiality to the matters brought before the Board of Directors and do affirm that we will not discuss the specifics of issues related to individual unit owners outside of the Boardroom, nor will we relate the content of discussions held in the Boardroom to outside parties”.

Now, one of our board members has put forward this item on the agenda of our forthcoming meeting as follows: — (direct quote from board member)

“I would like it if we (board members) could discuss confidentiality, including the document we signed last month and how much information we can share with our spouses (including emails), with our neighbours and with other owners.”

How would you address this?  We have had board members in the past who have shared confidential information extensively with other owners even when this agreement has been signed by them.  How do you monitor this agreement?  This is an extremely sensitive issue.  Can you help please?

Paul replies:

Dear L.R.: I am pleased to see that your Board will be discussing how confidentiality applies. It may be the elephant in your room that needs to be addressed.

A Confidentiality Pledge is a promise that you will not share the information discussed at a Board meeting with anyone except those who are authorized to receive the information; in this situation only current Board members or trusted advisors.  The information should not be shared with anyone that does not have a need to know (e.g. lawyer, auditor, property manager, insurance carrier). A Board member’s significant other, neighbours and other owners receive copies of the Board Minutes, and that should suffice. Information  includes verbal and written interactions (e.g. board discussions, correspondence, emails etc.).

If you cannot trust your fellow Board members to keep the information shared at the Board table to themselves, it will quickly curtail any honest and frank discussions.  Sharing complaints received about other owners’ behaviour, vendors’ bids on projects, who said what during a meeting, and more, may undermine Board decisions and cause owners to lose confidence. It is a matter of ethical behaviour. Owners elect board members believing that they are trustworthy. In the future, no one will want to serve on the Board if every word they say, or matter brought forward will be placed under an electron microscope. Any Board member that disregards this fiduciary responsibility should probably resign.

The Condominium Act at 94(2) states that:

In performing the duties of the condominium corporation and exercising its powers, each director and officer of the board must

(a) act honestly and in good faith with a view to the best interests of the corporation; and

(b) exercise the care, diligence and skill that a reasonable and prudent person should exercise in comparable circumstances.

Monitoring if Directors are keeping meeting content confidential is very difficult. It is meant to be self-monitoring. However sad, rumours and gossip are alive and well and will soon reach the ears of other Directors who should remind their colleague of his/her duties.

Depending on the type of information shared, it may not only be a breach of ethics, it may violate privacy laws that apply to condo corporations. Privacy will be the focus of a future Q & A. Thank you for the question.

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