Active vs Nominee Directors - Key Differences

In corporate governance, not all directors play the same role. Two common types are active directors and nominee directors.

Active directors are hands-on in managing the company. They attend board meetings, vote on resolutions, influence strategy and operations, and fulfil their fiduciary duty in the company’s best interests. They actively shape the business’s direction.

Nominee directors are appointed to represent a shareholder or meet legal residency requirements. They usually have little or no involvement in daily operations and often act on another’s instructions. While their role is commercially passive, they still carry full legal responsibilities.

Key considerations when appointing:

• Control & Management – Tax residency can be affected if a nominee lacks genuine management control.

• Liability – Nominees can still be personally liable for breaches of duty.

• Governance – A board of only passive nominees risks poor oversight.

Comparison of Nominee and Active Directors Infographic