Active vs Nominee Directors - The Director

Hiring the right director is one of the most important decisions a company will make. For a full-time appointment, businesses follow a rigorous process with interviews, background checks and reference checks to ensure the candidate is the right fit before making an offer.

With a nominee director, that level of control does not exist. The company hires a corporate service provider, who assigns a director of their choosing. In most cases, the company’s owners have little or no interaction with this person. Often, the same individual is simultaneously appointed to dozens — or even hundreds — of other companies. In such situations, it is hard to believe they have meaningful knowledge of your business and if a regulator like the ATO asks them to demonstrate they are genuinely managing and controlling the company, the answer may be unconvincing. Moreover, any activity by any of the entities to which your nominee is a director tarnishes them individually and by extension all other companies to which they are a director. Future background checks on the company will highlight and require explanation of the relevant matter that could be unrelated, and uncontrollable, to your company’s actions.

Fractional directors work differently. Your representatives meet the candidate before engagement and decide if they are the right fit. Their experience is deeper, and their role more involved. At ONUS Directors, we cap each director’s portfolio at just 50 companies ensuring they have the time, focus, and commitment to truly understand and guide your business.

The Director