The Boardroom leak: Forensic readiness against insider threats in deal-heavy sectors

By Nupur Anand, Associate Partner – Forensic Investigation Services, Forvis Mazars in India

The Boardroom, once considered the trust circle, has transformed. The way its proceedings and meetings are now conducted has seen a drastic shift. Thanks to the evolving regulatory landscape, the rules of engagement have been overhauled to give way to newer ways. With tightening regulations, the stakes of strategic decisions have grown; Boardroom conversations are no longer confined to four walls or a handful of executives. With the change, threats pertaining to information leaks have significantly increased. Boardrooms are now threatened — not just from cyberattacks, but also from insiders with privileged access. Threats can originate from both outside cyber attackers and, alarmingly, from insiders with privileged access. As sensitive conversations shift from strategy to execution, the risks pertaining to Boardroom leaks grow more complex. This demands a robust forensic readiness framework to counter insider threats.

Protecting insider information as a result of discussions in the boardroom is critical and the need is driven by various reasons - regulatory mandates, contemplation of investors and maintaining public trust.

Sectors that play an important role in the economic growth are often prioritised in strategic deals are vulnerable to various threats. Access to confidential board-level discussions about restructuring, investment strategies, or deliberation on financing plans can tarnish not just organisation’s reputation but also disrupt investor confidence and economic continuity.

What is really happening?

Boardroom leak threats are escalating in deal-heavy sectors, where the foundation of success depends on confidentiality, strategic foresight, and maintaining a competitive edge. A single incident of leakage of confidential information can compromise bidding strategies, reveal sensitive financial data, or expose future business plans, giving competitors an unfair advantage. Financial sensitivity, competitive edge and market volatility are the top three reasons that propel us to protect boardroom discussions. Let us look at these reasons in detail:  

a)     Financial sensitivity: Leaks on undisclosed financial information on valuation can impact stock prices, disrupt deals, and lead to failed negotiations

b)     Competitive Edge: Access to confidential data on business propositions, bidding information or proprietary data can be exploited by competitors for various benefits  

c)     Market volatility: Premature disclosures such as senior management exits, auditor’s resignations or litigation cases may impact investor trust and trigger speculation in financial markets

Boardroom discussions often cover sensitive topics such as mergers and acquisitions, restructuring plans, fundraising, management transitions, and responses to crises.

These discussions have far-reaching implications.

1. Regulatory Mandates: Many sectors operate under stringent legal frameworks that mandate the protection of non-public, material information to prevent insider trading and market manipulation.

2. Investor Protection: Investors, especially those making early bets, rely on a level playing field. Leaks may distort market confidence and can lead to legal ramifications.

3. Public Trust: The integrity of boardroom confidentiality underpins public trust in corporate governance and market stability.

In 2021, the Securities and Exchange Board of India (SEBI) – the Indian market regulator – alleged that a director of a listed entity had shared unpublished price-sensitive information related to the acquisition of an entity prior to its official announcement. The incident triggered regulatory scrutiny and significantly undermined investor confidence, raising serious concerns around corporate governance practices. Similarly, disclosures regarding equity dilution, sources of funding, or whistleblower complaints discussed during board meetings, if made public, can have adverse implications for companies.

Predators are often seen as using sophisticated ways to get access to confidential discussions, threats have evolved from Dictaphones to Digital Espionage. Gone are the days when physical recorders planted under tables posed the biggest risk. Today’s threats are far more sophisticated:

·       Cyber Compromise: Boardroom systems, virtual meeting platforms, and even the personal devices of executives are targeted.

·       Social Engineering: Insiders may be coerced, manipulated, or incentivized into leaking information.

·       Physical Security Gaps: Unmonitored visitor access, misplaced devices, or unsecured conference rooms remain weak links.

Situations wherein organisations take up multiple rounds of due diligence, overlapping stakeholder engagement, financial reviews, pre-deal interactions can create ambiguity amongst employees and other stakeholders. This often leads to a desire for deeper insights beyond what is publicly disclosed, inadvertently creating opportunities to exploit confidential information.

It is possible to identify any potential boardroom leak in an organization prior to its occurrence:

a.     Unusual share market activity before announcements: Unexpected increase or drops in stock prices before official disclosures suggest insider leaks influencing investor decisions.

b.     Media or Competitor knows information prematurely: Reporting on confidential information through undisclosed sources by media/ news reports.

c.     Unusual access pattern to sensitive files/information: Repeated or unauthorized access to confidential documents.

d.     Regulatory or legal inquiries after internal discussions Tip offs to regulatory authorities and legal scrutiny after key boardroom discussions.

e.     Competitor matching the pricing: Competitor consistently submits bids/ tenders just under your price and matches your technical capabilities.

In India, leaks of confidential information from boardrooms often fall outside the scope of mandatory reporting requirements, resulting in many such incidents going unreported. Nevertheless, companies are recognising the importance of investigating these breaches internally to identify weaknesses in governance practices.

The first step in addressing such leaks typically involves creating a robust incident response plan. This includes updating internal policies and procedures that will allow companies to initiate investigations, strengthening data protection protocols, and conducting thorough investigations to trace the source of the breach.

A lesson can be learned from a 2006 case involving an IT solutions Enterprise, which was entangled in a boardroom scandal after sensitive details about its acquisition strategy were leaked to the media—allegedly by one of its board members. In response, the Company hired a private investigative firm that employed questionable and potentially illegal tactics, including "pretexting"—impersonating individuals to obtain telephone records of board members.

The incident triggered regulatory scrutiny and led the company to disclose in a filing with the U.S. Securities and Exchange Commission (SEC) that it was cooperating with an official inquiry into the investigators’ conduct. The case remains a cautionary example of the need for ethical boundaries in internal investigations and reputational risks associated with lapses in corporate governance.

How can organisations prepare themselves to protect, detect and respond to insider leaks before they cause irreversible damage? Here are some measures:

a)     Establish Confidentiality Policies: Implement clear and enforceable confidentiality policies tailored to the need of protecting sensitive board-level information and clearly outlining their responsibilities and consequences for violations

b)     Enhance physical security measures:  Implement physical security protocols around sensitive meeting areas and data handling practices such as restricted access to boardrooms, conduct physical inspections to detect any unauthorized devices for surveillance, etc.

c)     Risk Assessment: Create a risk assessment based on individuals with access to sensitive data and evaluate potential insider risk:

d)     Restrict information access control: Recommend least privilege access policies and only authorized individuals can view or handle sensitive boardroom data, helping to trace and prevent leaks by limiting exposure and maintaining audit trails.

e)     Develop a forensic incident plan that clearly defines the roles and responsibilities of all stakeholders in the event of a suspected boardroom leak. Organizations should implement an IT infrastructure that maintains logs of all access, modifications, and downloads of sensitive data.Top of Form

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g)      Organisations must define policies and procedures that will allow them to preserve evidence and allow them to respond to damages.

h)     Employee awareness and training: Awareness programs for directors and employees on the importance of confidentiality, recognizing insider threats, and reporting suspicious behaviour.

As organisations grow more consequential and complex, the need to protect boardroom confidentiality has never been greater. Boardroom leaks not only jeopardize companies but can disrupt investor trust, impact public markets, and erode economic stability.

Forensic readiness is no longer a reactive approach — it is a core pillar of governance. Organizations that embed robust prevention, detection, and response mechanisms today will be better positioned to protect their integrity tomorrow.