Dummy Director

A person on a company's board of directors who votes and acts on the wishes of a non-board member. Dummy directors are most commonly used when a private company is in the process of going public, and it needs to establish a board of directors with a minimum number of seats to meet regulatory requirements. These temporary directors perform very limited duties. Once suitable directors can be found, the dummy directors resign and the company's shareholders elect real directors.

Also known as an accommodation director or nominal director.

A corporation's directors are legally bound by the prudent person rule, which requires them to each use the same standard of care in their decisions that a rational person in similar circumstances and with a similar background would use. If directors fail to exercise this level of care, they could be found liable for recklessness or gross negligence. For this reason, except in the short-term case of forming a corporation, it is unlikely that someone would be willing to sit on a board as a dummy director in order to execute the wishes of a non-board member.

Investment dictionary. . 2012.

Look at other dictionaries:

  • dummy director — n. A director of a corporation who is in fact merely a figurehead and who has no real interest in the corporation. The Essential Law Dictionary. Sphinx Publishing, An imprint of Sourcebooks, Inc. Amy Hackney Blackwell. 2008 …   Law dictionary

  • dummy director — A person who, although nominally a director of a corporation is a mere figurehead and discharges no duties. Goldenrod Mining Co. v Bukvich, 108 Mont 569, 92 P2d 316. A person to whom a share of stock in a corporation is transferred in order to… …   Ballentine's law dictionary

  • dummy director — One to whom (usually) a single share of stock in a corporation is transferred for the purpose of qualifying him as a director of the corporation, in which he has no real or active interest. One who is a mere figurehead and in effect discharges no …   Black's law dictionary

  • director — di·rec·tor n 1: the head of an organized group or administrative unit or agency 2: any of a group of persons usu. elected by shareholders and entrusted with the overall control of a corporation ◇ Directors owe a fiduciary duty to the shareholders …   Law dictionary

  • dummy — I. noun (plural dummies) Etymology: 1dumb + 4 y Date: 1598 1. a. a person who is incapable of speaking b. a person who is habitually silent c. a stupid person 2. a. the ex …   New Collegiate Dictionary

  • Dummy Taylor — Luther Dummy Taylor Pitcher Born: February 21, 1875(1875 02 21) Oskaloosa, Kansas, United States …   Wikipedia

  • The Dummy — Infobox Television episode Title = The Dummy Series = The Twilight Zone Caption = Cliff Robertson in The Dummy Season = 3 Episode = 98 Airdate =May 4, 1962 Production =4826 Writer =Rod Serling (Based on an unpublished story by Lee Polk.) Director …   Wikipedia

  • John Cromwell (director) — Infobox actor name = John Cromwell caption = birthname = Elwood Dager Cromwell birthdate = birth date|1887|12|23|df=y birthplace = Toledo, Ohio, USA deathdate = death date and age|1979|9|26|1887|12|23|df=y deathplace = Santa Barbara, California,… …   Wikipedia

  • Now Who’s the Dummy? — Infobox Television episode Title = Now Who’s the Dummy Series = King of the Hill Caption = Season = Episode = Airdate = Sunday 18 February 2001 Production = 5ABE14 Writer = Johnny Hardwick Director = Dominic Polcino Guests = Tom Poston Episode… …   Wikipedia

  • Larry Williams (director de fotografía) — Este artículo o sección sobre biografías y cine necesita ser wikificado con un formato acorde a las convenciones de estilo. Por favor, edítalo para que las cumpla. Mientras tanto, no elimines este aviso puesto el 24 de septiembre d …   Wikipedia Español

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