The Nominee Director in Canada

It is a common practice in Canada for an individual to be nominated as a director of a corporation by stakeholders who have a significant interest in the corporation, such as shareholders, employees or creditors. These directors are often called "nominee directors." While the duties owed by a nominee director to the corporation are identical to those owed by an independent director, the relationship of the nominee director and his or her nominating stakeholders poses unique challenges to the nominee director in fulfilling their duties. It is important to understand these challenges to ensure that risks inherent in the nominee director's position are mitigated and stakeholder expectations are effectively managed.