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There are different factors and basis for appointment of directors in a company’s board. Some of them are appointed based on their expertise in the respective sectors or industries as independent directors in the board, while others may be appointed by creditors or major shareholders or interest group as nominee director. Just like all directors, nominee directors are expected to act in the best interests of the company to which they are appointed. Further, they also owe the same legal fiduciary duties to the company similar to other directors. Nominee directors bears additonal expectation as they do not only manage and perform in the company’s board, but they are commonly expected by their appointers to represent the interest of the appointers in any commercial decisions made by the board of the company and also to update the appointers on the company’s performance from time to time. The objective of this paper is to study the duties owed by nominee directors in the event of conflicts of interest that possibly occurs between the company where they are sitting as board members and their appointers. The study will focus on the law governing them in Malaysia. This research adopted qualitative analytical method in which books, article journals, internet sources and other relevant documents are analysed. It was found that it is very crucial for the nominee directors to observe certain rules pertaining to their duties and involvement in decision making in order to mitigate such conflicts.
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