Some company policies want to restrict the viewing of a list of users. Thus they would like to disable the people directory and any way to access it.
Is detailed in this documentation: http://confluence.atlassian.com/display/DOC/Hiding+the+People+Directory
However if you navigate to the profile of a user, and then click on the "People" in the breadcrumb link (Dashboard >> People >> FullName >> Profile) or you go to the URL directly <CONFLUENCE_INSTALL>/browsepeople.action, you will be able to access the people directory.
To workaround this, set up Apache webserver in front of confluence and redirect requests to this URL.
It would be good to have an option to disable the People Directory section in the Browse menu of the Dashboard page.