Confidentiality is a central tenet of the coaching relationship - without belief in confidentiality the client is unlikely to open up and talk about what is really going on for them. If they find we have blabbed to the HR department about what has been said in a coaching session they are unlikely to come back for another session, never mind trust us again! Confidentiality is therefore key to effective working.
Yet confidentiality cannot be an absolute and I don't think we should guarantee it to clients. For example, like most professional coaches I have my own coaching supervisor and sometimes I need to talk about my cases with her - its part of the deal of keeping me working at my best. Clients therefore need to know that I might be talking about them - or at least my response to them - to someone else. Usually this is not a problem as long as I explicitly let them know that this might be a possibility as part of the up front contracting process. Clients often seem less bothered by confidentiality issues than I do!
However there are times and eventualities that cannot be foreseen and pre-empted by the initial contract e.g questions of legality, safety, health, impact on others etc. In such (unusual) circumstances I would always encourage my client to 'break the seal' themselves and have the outside conversations that need to be had. Fortunately in 20+years of working with clients this has always been enough to move the situation on and I've never had to break confidence myself.
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