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HDFC Bank Leak Shows Danger of Boards Losing Control of Data

Boards must take measures to ensure that sensitive information remains private

EXECUTIVE SUMMARY: Boards of directors must be able to communicate regularly. But many companies ask their directors to exchange messages using conventional methods like email, Facebook or WhatsApp. Diligent Boards, with its real-time messaging and ultra-secure environment, is a better solution.

Boards and sensitive information

There is no question that board members must exchange sensitive information, which is defined by the corporate governance watchdogs as “unpublished price-sensitive information.” Price-sensitive means that the data could cause the company’s stock to rise or fall.

But too many companies around the world ask themselves to ask for data via traditional means of communication like Facebook or WhatsApp.

The dangers to directors of using traditional search Means of communication were highlighted in India on December 22, 2017 When the Securities and Exchange Board of India (SEBI) raided banks, brokerages and offices of traders, seizing computers and mobile phones.

Danger of insider trading

SEBI had, in 2015, beefed upits regulations and enforcement in regard to insider trading. The charge of insider trading was extended to securities listed and proposed to be listed on stock exchanges. This was an expansion from the 1992 Regulations, which was only applied with respect to those that were listed. Additionally, the Regulations thus strengthen the definition of who insiders. The scope of ‘connected persons’ under the Regulations has been referred to in a contract, fiduciary or employment relationship or has direct or indirect access to unpublished price-sensitive information. Further, under the Regulations, the criteria for what constitutes ‘unpublished price-sensitive information’ would be the information is ‘generally available’ or not.

Boardroom confidentiality faces challenges

The Australian Institute of Company Directors pointed out in a recent report : “ What is there to do with hackers?”

“If your board is not using digital apps and platforms for board communications, the question is, why? If you see your answer below, it’s time to think again:

  • Mobile apps are not secure enough.
  • Paper is just as good.
  • I’m too busy to learn to use an app.
  • I’m on multiple boards; multiple apps are too time-consuming / confusing to use.
  • I am a decision maker, not a tech geek.
  • Some board members are uncomfortable with the technology.
  • Our technology specialist on the board has been advised against it.
  • We have other, more urgent priorities.

This attitude has to change. Confidential information is more exposed than ever before. Real-time communication tools and social media are widely available. The information is always at risk of inadvertent or intentional exposure. This means that board members have to react. “

As a report published in the Harvard Law School Forum points out: “Confidential board information is unique in the corporate context. It includes material, non-public information, the disclosure of which is regulated by federal securities laws and by company-wide policies and procedures, but it also includes sensitive boardroom discussions that have both personal and business elements and implications. In an order for boards to function effectively, directors must feel comfortable expressing their views in the boardroom on corporate matters honestly and freely, without concern.

The Australian Institute notes that text messaging and emails are not secure technologies.

“Both are open to hacking and snooping. Ditto when it comes to virtual attendance attendance of some board members. Without the right security services, some platforms for beaming on a virtual board member The most common mistakes include leaving unprotected laptops and mobile devices in taxis and planes, or downloading malware from private email accounts. “

Diligent Messenger secures communications

Diligent Messenger mitigates the risk of breaches, leaks and misdirected messages with a secure communications tool that’s quick to install and easy to learn.

Moving confidential board communications out of personal and corporate email systems is easier than ever. Diligent Boards integrates with virtual board meeting software, like Diligent Boards, to enable secure messaging and real-time collaboration.

It uses the same tools every day, reducing the temptation of workarounds. The platform’s intuitive features are informed by Diligent’s work with 145,000+ executives worldwide.

Diligent Messenger delivers the functions security-conscious users seek while on the go, including:

  • Auto-sync
  • Auto-sync of groups, contacts and messages across devices
  • Email controls
  • Blocks against email forwarding and ‘copy and paste’, plus a special feature for message retraction
  • Pre-set groups
  • Pre-set groups and contacts (to eliminate email address ‘oops!’)
  • Message notifications
  • Notification for when messages are sent, delivered and read, with additional notifications for unread messages or announcements across boards

Take control of security

Take control of who sees, sends and saves what. As with Diligent’s virtual board meeting software, administrators want to be able to customize settings according to governance and regulatory requirements. For Diligent Messenger, this includes:

Log-in authentication. Log-in authentication and access that can be adjusted with the click of a button or the swipe of a screen.

Message retention. Message retention, for preserving what’s required (and purging the rest).

Searchable archive. Message archival that saves what’s needed and makes it searchable.

Secure compromised devices. Swift ‘wiping’ capabilities for lost or compromised devices.

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