Global Direct Investment Solutions

Corporate Development for a Networked World

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Project Confidentiality

Bruce Donnelly   bruce@gdi-solutions.com    (Biography)

There are many legitimate reasons why the plans for major investment projects often need to be kept very confidential.  The reasons are not always obvious to everyone.

Regardless of the reasons, however, the principle is very simple.  Details about a project need to be treated as confidential whenever the responsible executives request such consideration in the performance of any introductions or research work on their behalf.

Just as professionals in government service are not allowed to simply decide for themselves whether the confidential material they receive should actually be classified and treated as confidential, this is not a judgment call to be made by those who support the strategies and business plans of corporate executives, including ourselves.

It is up to the executives to decide what does, or does not, need to be protected as confidential, and with whom or at what stage of their plans any specific details may be shared.  They are always presumed to be in the best position to make that judgment.  Information is shared or restricted according to their instructions, not our own judgment.

Every participant in the services of GDI Solutions is expected to fully respect the confidentiality requests of corporate executives and other participants, without the need for legal "non-disclosure" agreements with us or each company for each project.  This is basic professional conduct.  The absence of explicit legal constraints is not an excuse for unethical or unprofessional conduct.  Abuses jeopardize the professional reputation and services of this company and all the other participants in our work.  Zero tolerance.

As explained separately (in The "Rumor Mill" Solution), it is very difficult for companies to maintain absolute secrecy about major projects for many reasons.  We cannot, and do not, assume liability for the risk that somebody, somewhere may find out about a sensitive project or share project knowledge inappropriately, whether or not the "leak" is triggered by the actions of any participants in the GDI Solutions services.

There are also very legitimate reasons why we may sometimes encourage executives to agree in advance to share some project details selectively among relevant participants in our work.  A more thorough briefing may enable specialists to anticipate needs or issues which were not already identified by the project leaders or their advisors.  They can be more responsive to information requests through a better understanding of the investor's business and critical project requirements.  Knowledge needs to be shared to add value, but sometimes value can also be destroyed when knowledge is shared inappropriately.

It is not our objective to needlessly restrict the professional flow of knowledge which would enable participants in our work to provide much better support to the investors we serve.

On the contrary, we prefer to introduce investors directly to the specialists who seem to be in the best position to support their interests, and then encourage the sharing of project plans with such professionals as appropriate so that they can be more helpful.

The choice about what to share, when, and with whom is for the executive to decide.

As a service which is built upon the foundation of professional working relationships within three large global networks of contacts in multiple industries and professions, we may learn about project confidentiality problems quickly.

We take any reports of project "leaks" very seriously because of the risk to our service relationships among the executives and professional advisors we serve.  Confidentiality problems are a threat to the development of a faster, better, and larger flow of direct investment projects, and are therefore of great concern to us.

We have a very well-organized process for feedback from investors, and for the tracking of all "project leads" and any referrals we make, and for the efficient sharing of information as appropriate about confidentiality risks, with a very long "institutional memory".

Any organization which is found to abuse the trust which is reflected in project referrals and confidentiality requests will forfeit future participation in any of the services offered by GDI Solutions.  Zero tolerance.  We cannot force participants to respect confidentiality, but we will not do business with those who betray our trust in their professionalism.

They may reliably expect to never receive a referral from us again.  Future investors which express specific interest in their area may also be alerted to our concern about potential confidentiality issues prior to making any such introduction.

We may not be able to openly share the feedback we receive about specific breaches of confidentiality, such as for legal or other constraints (including continued confidentiality!), but we take any such feedback from investors or professional advisors very seriously.

We will not forget actions which jeopardize the reputation of this firm or other participants in our services, and we will take this into consideration in our future work on behalf of any participating investor, from anywhere in the world.  We cannot enforce respect for project confidentiality, but there will be consequences for disrespect.

We believe most professionals in this niche fully appreciate and respect the need for project confidentiality, but sometimes their high enthusiasm for a project, local political interests, or inexperienced staff can lead to lapses of judgment and unintentional problems, as illustrated in the example at right. 

Regardless of good intentions or excuses for mistakes, "leaks" or other disrespect for project confidentiality are simply not acceptable conduct for participants in this service.

To illustrate the importance of confidentiality, nearly a decade ago a seemingly innocent case of disrespect for confidentiality by an economic development representative of a local investment promotion agency caused, despite good intentions, a very large project to be lost to the entire country which was expected to win it, and nearly resulted in a major lawsuit and very bad publicity for the area involved over the potential damages.

Local officials tried to guess the identity of the unidentified investor, and started to call many companies trying to find out more information about the project, unintentionally alerting competitors in the process and quickly alarming the most senior executives at the company, who also started to receive multiple calls asking about their very confidential project.  As the callers pretended to know more than they really did in the hope of learning more or confirming their assumptions, they created the impression of a serious breach in project confidentiality.  Past information requests by company staff who had simply requesting a brochure about the area soon enabled them to "put 2+2 together" and guess the identity of the investor, at which point they started calling any executive they could reach at the firm.

In their zeal to pursue this large project, the local officials had hoped to gain some advantage to help them "win" the anonymous project through more direct contact with the company.  By not respecting the explicit confidentiality request of the referral process through which they were being considered for the project, they caused very real harm beyond their imagination.  They also ruined their good opportunity to win a project which could have become a very prominent and valuable investment in their area.  Instead of gaining an advantage, they lost that opportunity and others too, costing hundreds of jobs and many millions of dollars in potential value to their area.

The officials involved did not even realize that the continued confidentiality of the project was probably the main reason why they were not sued by this angry investor for millions of dollars in actual and potential consequential damage to business development plans for a very strategic investment on which they had invested a lot of time and resources.  As far as they knew, they were just off the short list, and did not perceive the damage done.  We could not inform them of the full consequences of their irresponsible actions, both to the company and their community.

We, however, know the impact on that furious investor.  We still take this problem into consideration when dealing with any projects for which that location might otherwise be regarded as competitive, even though the individuals responsible for that specific breach of confidentiality are no longer employed by that organization or in this profession to the best of our knowledge.  The people who did the harm in this instance may be gone, but local respect for confidentiality may still not be adequate, and that is a risk which some investors simply cannot afford to take, and we cannot afford such a threat to our own professional service.  There are many alternative areas which do respect confidentiality.

We take the responsibility for project confidentiality very seriously, and we expect all participants in our services to do the same.  We have strong global networks of contacts and a very long memory about any cases of disrespect for this critical issue.