ABSTRACT
Companies, upon registration, are required to appoint a number of persons, designated as directors, whose function is to carry out—whether acting jointly or individually—the obligations imposed on them by the companies legislation. Nominee directors are common in large companies, mostly representing majority shareholders or major creditors where huge investments have been put into the business. A company is a legal person formed by means of the association of two or more individuals who have decided to create, with the provision of capital and for a lawful purpose, a legal entity with a personality independent and distinct from that of the human members who found, control and administer the organisation. D&O insurance is of limited relevance where minority shareholder remedies are sought but in the case of a derivative action, it is potentially of some significance. D&O policies are generally written so as to cover the directors of the parent company and the directors of its wholly-owned subsidiary and associated companies.
