Have you ever noticed how board members sometimes conflate confidentiality and transparency, two important, but essentially opposite, values? Nonprofit organizations are expected to function in a transparent manner, but if you are supposed to function in an open manner, how can you keep information confidential? It helps to understand the difference between the two terms and how they relate to each other.
Transparency is the disclosure of information to the public and supporters to indicate the organization is managed well, functions in an ethical manner, and handles its finances with efficiency and responsibility. It's part of your duty of obedience. Confidentiality is the obligation and right not to disclose information to unauthorized individuals, entities, or processes if it would harm the organization, its business relationships, or an individual. It's part of your duty of loyalty.
We are all constantly aware as board members that our stakeholders – our clients, the government, the sector – want and expect transparency from our organizations. As the Form 990 asks for more and more disclosure – How much does our CEO make? How did we arrive at our compensation decisions? Do we have X, Y, and Z policies? – it raises expectations that all information is fair game for public knowledge.
But transparency does not, and should not, extend to boardroom decision making. Board discussions are confidential. Period. Even if your organization is subject to sunshine laws, there are exceptions for topics of extreme confidentiality such as legal and personnel issues. Your board should have a rigorous confidentiality policy that board members agree to and adhere to without exception.
Why is confidentiality so critical? Board members must feel at liberty to express their ideas and opinions in an open and welcoming atmosphere, and nothing chills candor like the fear that one's words will be repeated (or worse, misquoted) outside the boardroom. The only way your board can transform your organization is if it feels free enough to discuss the big, audacious issues…to dare to dream…and to challenge each other's assumptions about how much you can achieve.
Look at this way: A strict adherence to transparency and disclosure ensures that your board is firmly grounded in compliance with the law, while a culture of confidentiality ensures your board has the freedom to soar as far and as high as it may.