Nominee Directors: Caught Between the Devil and the Deep Blue Sea

Abstract

A nominee director stands somewhat apart from the other directors by virtue of having been nominated by a shareholder, or other stakeholder of the company, to represent the shareholder’s particular interest. Nominee directors are de jure directors of the companies to whose board they have been appointed. They are not a distinct class of directors and they owe the same duties to the company as other directors, whilst at the same time, representing through expectation of loyalty or legal duty, the interests of the appointer. The difficulty that arises for a nominee director is that in the eyes of the law they are treated like any other director, but there is usually an expectation that they will act with some awareness of their appointer’s interest. This article discusses the role of the nominee director with a particular focus on the English and Cayman Islands legal position. Nominee directors, English and Cayman Islands legal position, duties, conflict of interest