Section A

What is a 'shadow director'?

Answer options:

A director who rarely attends board meetings.

A person in accordance with whose directions or instructions the directors of the company are accustomed to act.

An alternate director appointed to step in when a regular director is ill.

A director appointed by the employees.

How to approach this question

Identify the statutory definition of someone who controls the board from behind the scenes.

Full Answer

B.A person in accordance with whose directions or instructions the directors of the company are accustomed to act.✓ Correct

Under s.251 of the Companies Act 2006, a shadow director is a person in accordance with whose directions or instructions the directors of the company are accustomed to act. They are not officially appointed but exert control over the board, and are subject to many of the same legal duties as de jure directors.

Common mistakes

Confusing a shadow director with a de facto director (someone who acts as a director but hasn't been validly appointed).

Question 36 All questions Question 38

Practice the full ACCA LW — Corporate and Business Law Practice Exam 6

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