Protecting confidential business data and intellectual property is important for every organization, but knowing the specific information you must safeguard isn’t always clear. Businesses rely on nondisclosure agreements to document key information that must remain confidential.
Read on to learn more about nondisclosure agreements, and discover how board board management software protects sensitive business information.
What Is a Nondisclosure Agreement?
A nondisclosure agreement (NDA), commonly referred as a confidentiality agreement or a secrecy agreement, is a legally binding contract that details the sharing of certain confidential information while restricting the recipients from disclosing that information to others without proper authorization.
Elements of a Nondisclosure Agreement
To ensure due diligence, it’s highly important to confirm nondisclosure agreements are written correctly and include all necessary information. While each NDA is unique, most NDAs include the following components.
Identification of Participants
NDAs must define exactly who is involved, including legal entities, and specify who they can and cannot share certain information with to avoid confusion.
List of Confidential Items
NDAs must specifically detail the information that needs to remain confidential. By nature, employees will speak to others about their jobs, so clearly outline the confidential information.
Duration of the Confidentiality Agreement
Some confidentiality agreements are only intended to keep new or developing business information confidential for a limited amount of time. Make sure to specify any key dates pertaining to confidential information in the NDA.
The signee of a nondisclosure agreement cannot be held responsible for someone else’s actions, which means it’s important to clearly state that only leaks directly linked to their own actions can be held against them. This means any information you were unaware was public knowledge before signing the NDA will not result in consequences.
Types of Nondisclosure Agreements
Next, we’ll cover some of the different types of nondisclosure agreements. It’s key to choose the right type of NDA to protect everyone involved.
Unilateral NDAs work in one direction and only require one party to sign and follow them, such as an employee or contractor agreement. The other party typically shares information with the signer of the nondisclosure agreement and uses their discretion to control when or if certain parts of the NDA may be shared with the public or specific parties. This is generally the most common type of nondisclosure agreement.
With a bilateral NDA, both parties are required to protect sensitive information they share with each other. This type of nondisclosure agreement is especially common among partnership agreements or companies that merge or collaborate on projects together.
Multilateral NDAs are more complex nondisclosure agreements that involve three or more parties. With these nondisclosure agreements, at least one party shares information with a minimum of two separate individuals, businesses, or other groups of people.
Achieve Complete Board Alignment With OnBoard
OnBoard enables businesses of all sizes to securely store confidential business information in a cloud-based hub. OnBoard’s board management software not only provides a secure repository for protecting nondisclosure agreements, it also tracks permissions and access to maintain the highest level of security.
Additionally, OnBoard is a powerful solution that allows organizations to conduct efficient and productive board meetings. With its comprehensive set of features, the platform addresses the unique needs of modern boards.
With OnBoard, your board can experience streamlined workflows, enhanced communication, and secure access to critical information, ultimately empowering your organization’s senior management to focus on strategic initiatives that drive success.
Download our board meeting agenda template for first-hand experience of OnBoard benefits.
Frequently Asked Questions (FAQ)
Is a Nondisclosure Agreement Legally Binding?
Nondisclosure agreements are legally binding. Like other types of contracts, NDAs use legal leverage to make it clear that keeping sensitive information confidential is a must, not a suggestion.
What Voids a Nondisclosure Agreement?
A nondisclosure agreement (NDA) is a legally binding contract. There are several circumstances or actions that can potentially void or invalidate it, such as expiration, fulfillment of purpose, breach of contract, failure to identify confidential information, and more.
Can You Refuse a Nondisclosure Agreement?
Although it can come with negative consequences, like not getting a job or missing out on a business agreement, individuals can decide whether or not to sign a nondisclosure agreement.
About The Author
- Josh Palmer serves as OnBoard's Head of Content. An experienced content creator, his previous roles have spanned numerous industries including B2C and B2B home improvement, healthcare, and software-as-a-service (SaaS). An Indianapolis native and graduate of Indiana University, Palmer currently resides in Fishers, Ind.
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