A nominee director by One IBC is one appointed to perform duties assigned to him by the nominator, an economic interest holder of the company, normally a shareholder or other legal or business entities. Although acting on behalf of their nominator, a nominee director has certain legal responsibilities that must be discharged independently.
First and foremost, a nominee director owes a fiduciary duty to the company. Though they may be appointed by a specific party, their ultimate duty is towards the welfare of the company at large, rather than being directed to the interests of any one person or entity appointing them. The duty of loyalty imposed upon them entails avoiding conflicts of interest and making decisions that will benefit the company as a whole.
Nominee directors are expected to act with due care, skill, and diligence-that is, to attend board meetings, be properly informed about the company’s affairs, and ensure that proper material is available for making a decision. They could face legal liabilities if they fail to do so.
The other fundamental duty is the duty of confidentiality. This means a nominee director must not disclose any confidential information concerning the company, unless that information has been specifically given to him or her and even then not to the nominator, unless the company has given specific consent.
In many jurisdictions, the nominee directors have similar or the same fiduciary duties and legal obligations as other directors. They shall ensure that laws and regulations related to companies are complied with, proper books of account are maintained, and no actions are done that would hurt the company or create legal issues.
Though the nominee directors represent interests, the law would dictate acting in the best interest of the company on the whole.