A nominee director is a third party that is officially registered as the administrator of an offshore corporation instead of its real beneficial owner or manager, who may then remain anonymous. The nominee director is normally provided by the agency responsible for the formation of the company, or by the registered agent. It can be either an individual or legal person, i.e. another company specifically incorporated for this role. It is common to use the nominee director in conjunction with a nominee shareholder, since this way the client does not appear either as owner or as manager of the company.
Because the main purpose of the nominee director is to protect the client's privacy, their function in most cases is merely formal. That is, they appear to be in charge on the documents of the company, but they do not perform any executive function and are merely required to sign certain documents, including the minutes of the annual meeting of the board of directors or some extraordinary resolutions taken at the request of the client. All the operating functions are usually performed by the real owner, to whom the nominee director has given a general power of attorney before a notary, entitling them to perform the daily activities of the company. This includes opening and managing bank accounts, signing contracts, etc... Because of their lack of executive power, these nominee directors are popularly known as straw men.