Which takes precedence? The duty of client confidentiality or the possibility of new business?
“Bankruptcy Watchdogs Say McKinsey Disclosures Are Inadequate,” The Wall Street Journal, May 18, 2016 C1. In order to get new business, McKinsey needs to disclose any potential conflicts. But they say their client confidentiality agreements prevent them from telling bankruptcy trustees who they’ve worked for in the past (where the prior work would be a conflict with the new work).
So, McKinsey needs to choose between violating their client agreements by disclosing who they’ve worked for or giving up new business.
Do you have vendors (lawyers, bankers, advisers, doctors, etc.) that you don’t want others to know you’ve worked with? Who owns that information? If the vendor breaches their duty, do you have a fiduciary duty to your shareholders to sue for damages? (See prior post.) Is it really confidential information anyway, given the fact that a review of your accounts would show payments to that vendor (albeit not the substance of the advice)?