IVA Glossary
S
Shadow Director
The term "Shadow Director" refers to the person usually not appointed formally as a director. Nevertheless, the directors of the company are acting according to the instructions and directions of this Shadow Director. Therefore this person can be said to be an implicit director whose recommendations and opinions are essential for the company directors.
It should be noted, though, that not all the persons or professionals who for instance give an advice to the directors are shadow directors.
Generally speaking, if the company's official directors always take another person's advice into account when they need to make an important decision, this advisory person is a shadow director. Moreover, shadow directors also undertake the responsibility of directors according to the company law no matter if they are not formally appointed as directors. This is the difference between a one-time advisor (who is usually an expert of a particular field only), and a so-called shadow director who gives pieces of advices to the "real" directors related to very different but important issues.
It should be noted, though, that not all the persons or professionals who for instance give an advice to the directors are shadow directors.
Generally speaking, if the company's official directors always take another person's advice into account when they need to make an important decision, this advisory person is a shadow director. Moreover, shadow directors also undertake the responsibility of directors according to the company law no matter if they are not formally appointed as directors. This is the difference between a one-time advisor (who is usually an expert of a particular field only), and a so-called shadow director who gives pieces of advices to the "real" directors related to very different but important issues.
