Sorry, I did not mean to imply that security was non-existant or horrible, just it is online, so no absolutes.
iCloud is really not useful, IMO, for collaborating as only you or your AppleID enabled devices can access the files.
I have multiple online storage accounts with the common free services, but my most used is www.box.net. Many document apps will readily support it, and even if one does not, you can use the box.net app itself to access files, then open them in the app usually. And you can share your online folders, with reasonable controls on access to keep control of who can see (and upload or download) what.
A lot of people I know use dropbox as well, but they are usually using paid accounts (often their company sets one up for them to use to exchange files with clients) and I don't know how much better is the security on a paid dropbox account versus a free one. I suspect the free ones are on a par with box.net.
You could also use add security by using some sort of PGP or other encryption tools to encrypt files put up on the shared folder(s). You'd exchange public keys with your colleagues so they could decrypt those files once they download them. That may be overkill for many peoples needs though.
Another option, if you have an online hosting account, is to get one that offers SFTP access and use that for sharing files (the downside of that is having to distribute the password to colleagues, so you could loose control of it if one of them is careless or thoughtless with it). It seems more and more document-type apps for iOS are supporting generic FTP and SFTP as well as the popular free online storage solutions.