Skip to Main Content

Helping Family Businesses
Prosper Across Generations®

Confidentiality in the Information Age

In the age of always-on information, the line between public and private is becoming increasingly blurred. News programs and articles are filled with unnamed sources divulging corporate secrets and leaking policy decisions. Armies of paparazzi follow celebrities’ every move, turning the most intimate details of their lives into fodder for tabloid magazines. The information on MySpace and Facebook pages stealthily spreads across the Internet, turning private information public without the original author’s knowledge or consent. In short, nothing is confidential.

Only a generation ago, people valued confidentiality and privacy, equating it with loyalty. Airing your own or others’ dirty laundry in public simply wasn’t done, even by the media. Today, however, the notion of confidentiality hardly exists. People rarely keep secrets; individuals share their private thoughts with total strangers in blogs and online forums. Therefore, it is reasonable to be concerned that many in your family-owned business will treat non-personal and confidential business information at least as nonchalantly.
Even if a strong sense of privacy has eroded in our broader culture, businesses still need ways to handle confidential information. This can be particularly challenging in a family business, where the additional distinction between business and family can add complexity to notions of confidentiality. Based on my experience working with family businesses, I offer the following tips on handling confidential information in an age where confidentiality and privacy are increasingly undervalued.
Assume That There Will Be a Breach of Confidentiality
First, assume that most information will not be kept confidential. Many people do not understand confidentiality, and the younger generation in particular has been raised in an environment where people rarely keep secrets. Assume that whatever you say, even behind closed doors or in a private meeting, can and will be shared with others. For those decision makers with whom you must share confidential information, be explicit in your explanations of what you mean by “confidential” and remind them that part of earning the full trust of leadership means demonstrating an ability to reliably keep necessary confidences.
In addition, assume that all electronic files will be shared. Documents, spreadsheets, and especially emails tend to have a life of their own, reaching far beyond their intended audience. Never use email when you need to communicate something privately, since emails can be forwarded with a simple click. Confidential information is most safely shared through face-to-face communication.
Close the Doors
Trust is often one of the greatest assets of the family business, so enterprising families have a lot to lose if they don’t safeguard trust effectively. For any family business to succeed, the family must agree that what happens behind closed doors stays there. As a consultant, I often teach family ­business owners that conflict and disagreements are fine, as long as they are worked through behind closed doors. When the stakeholders in a family business have a closed-door conversation, no matter what type of conflicts or heated discussions may occur, they need to be able to present a united front as soon as the doors are reopened. Doing anything less violates trust and invites others to second-guess the business’ leadership. Family businesses cannot risk appearing divided when they are in front of their employees. Adopting a formal code of conduct that touches on these types of issues can be beneficial, because it sets rules and guidelines for working through confidential matters while establishing clear consequences for violating those rules.
Seek a Common Definition of Confidentiality
In a multigenerational workplace, employees have very different understandings, assumptions, and expectations of confidentiality, even when they come from a single family. Generations X and Y (people born between the mid 1960s and the early 1990s) have grown up in a culture that does not strive to maintain confidentiality. In general, they do not understand or respect privacy. This is not a criticism; it is merely a fact. This is different from the world in which the older generations were raised, when privacy and confidentiality were respected and highly valued.
Because of these different assumptions and understanding, we must be more careful with our language. Stock phrases like “keep this under your hat” and “you didn’t hear it from me” have lost their meaning. Today we might be more likely to use these phrases to get others’ attention and practically guarantee that it will be spread around, rather than to mean that we truly expect what we say to be held in confidence.
Family businesses have to make concerted efforts to establish clearer boundaries for handling private information. Some families with whom we have worked meet this challenge by prefacing confidential information, reminding each other: “You’ll be told things here that you shouldn’t even tell your significant other.” While that may sound extreme or even inappropriate, it does make explicit where the boundaries lie.
In addition, we would recommend that families invest time and energy in educating their younger generation about what confidentiality means, why it is important, and how they can ensure they are not inadvertently violating an important confidence of the business. There certainly is an argument to be made for open and honest communication, but there is also a need to respect privacy and prevent leaks that could be hurtful to the family or the business.
As it is virtually impossible to keep a secret in the information age, the most viable long-term strategy for a family business to confront this challenge includes education and caution. First, educate. Don’t assume that the younger generation understands confidentiality in the same way you might. Second, be cautious. Only share truly sensitive information once a person has consistently demonstrated he or she can appropriately handle confidential information.
Hopefully these tips have provided you some guidance to help you manage this in your business.



Articles purchased or downloaded from Family Business Consulting Group® are designed to provide general information and are not intended to provide specific legal, accounting, tax or other professional advice. Since your individual situation may present special circumstances or complexities not addressed in this article and laws and regulations may change, you should consult your professional advisors for assistance with respect to any matter discussed in this article. Family Business Consulting Group®, its editors and contributors shall have no responsibility for any actions or inactions made in reliance upon information contained in this article. Articles are based on experience on real family businesses. However, names and other identifying characteristics may be changed to protect privacy.

The copyright on this article is held by Family Business Consulting Group®. All rights reserved.
Articles may be available for reprint with permission. To learn more about using articles for your publication, contact

8770 W. Bryn Mawr Ave., Ste 1340W, Chicago, IL 60631
P: 773.604.5005 E: 

© 2019 The Family Business Consulting Group, Inc. All Rights Reserved.

close (X)