Active vs Nominee Directors - Scope of Work
When hiring a full-time director, the foundation of the engagement is a clear, tailored job description issued by the . It defines the director’s responsibilities, expectations, and authority—ensuring alignment between the company’s needs and the director’s role. The scope is customised to the business, whether the director is a seasoned executive or a specialist in a particular field.
By contrast, appointing a nominee director means working within a fixed, provider-issued scope of work. This scope is usually identical across all the provider’s clients, regardless of an individual company’s operational needs. The structure of this relationship is also very different from a traditional employment arrangement in three key ways:
Annual prepayment – Nominee director fees are typically billed a full year in advance, unlike an employee salary paid monthly. Cancelling mid-year may allow for a pro-rata refund, but this is even rarer in standard a employment arrangement.
Fees paid by the shareholder, not the company – The invoice is usually addressed to the ultimate beneficial owner rather than the company itself, which is unusual for a staff role.
Deposits required – Most providers request a refundable deposit before appointing a nominee director. In what other staffing arrangement would you pay a deposit to hire someone?
A fractional director offers the flexibility and accountability of a full-time director. The scope is custom-built for your business, agreed upon upfront, and billed monthly in arrears, just like any other member of your team. The company, not the shareholder, pays the director’s fees. No annual prepayment. No deposit. Just focused, accountable leadership aligned to your operational needs.
Scope of Work