What is the proper approach to confidential information when working with a third-party vendor?

• A. Prohibit any sharing with third parties.
• B. Use non-disclosure agreements, data-sharing restrictions, minimum necessary access, and audit trails.
• C. Share as needed with no restrictions.
• D. Store information on local devices only.

Answer: (B)

Protecting confidential information when collaborating with a third party requires a disciplined approach that combines legal, procedural, and technical controls. An NDA creates a binding obligation about what information is confidential and how it can be used, and for how long. Data-sharing restrictions specify exactly what can be shared, with whom, for what purpose, and through which channels. The principle of least privilege ensures vendor personnel access only the minimum data and systems needed to perform their tasks, reducing exposure. Audit trails log who accessed what data and when, supporting accountability, incident response, and compliance.

Taken together, these elements provide enforceable protection, clear expectations, and traceability, making this approach the safest and most practical for safeguarding confidential information when working with a third party. Prohibiting all sharing is impractical; sharing with no restrictions invites leakage; storing information only on local devices neglects governance and risk management.