What is a shadow director & a de facto director?

Article Summary

A de facto director is an individual who has not been officially appointed as a director but acts in the position of a director and/or has power over decision making for the company. For someone to be classed as a de facto director they must do the work of a director of the company or act in the position of director.

Although the de facto director is not officially a director or has not been officially allowed a place on the board in the company, a de facto director will still have a high level of influence on the strategy, planning, and decision making of the company.

A shadow director is a person who is not validly appointed as a director but a person to whose instructions or wishes the de jure directors of the relevant company are accustomed to acting in accordance with, or a person who has influence over other directors of the company, or the board of a directors.