Which best describes a shadow director?

A shadow director is best described as a person whose directions the company acts upon. This definition is significant because a shadow director is not officially appointed or registered as a director but still influences the company’s decisions and operations. Their role may impact the governance and management of the company effectively, therefore they hold considerable power despite lacking the formal title.

Understanding this concept is important in corporate governance because it sheds light on accountability and liability issues. Even though shadow directors are not formally recognized in the register of directors, they can be held liable for the company’s actions if they are found to be exercising control or influence.

Other options, while they touch on aspects of roles within a company, do not accurately capture the essence of a shadow director. A fully appointed director is officially recognized and listed, a consultant is there to provide advisory services without exercising control, and a director only present for specific meetings does not embody the continuous influence characteristic of a shadow director.