Dummy Director Law and Legal Definition

Dummy director is a board member, although nominally a director of a corporation is a mere figurehead and exercises no real control over the corporation’s business. Share of stock in a corporation is transferred to a dummy director in order to qualify him/her as a director.

A dummy director act and vote in the interests or on behalf of a non-member. Dummy directors are most common in start-ups that have just become publicly-traded companies, since managers need to fill up a certain number of directors in order to meet legal requirements and therefore appoint or elect a number of dummy directors to serve temporarily until permanent directors can be found. In the interim, they tend to act on behalf of the management.