Understand 6 Common Types of Company Directors in Malaysia
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| **Information updated as of July 2025 |
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When it comes to running a company in Malaysia, most people think of directors as just "someone whose name is listed" in the company registration. But in reality, there are several types of directors, and even if your name isn’t officially listed, you may still be held legally responsible as a director — without even knowing it.
In this article, we break down the 6 most common types of directors under Malaysian company law, so you can better understand your role and your legal obligations.
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1. Executive Director
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This is the most common type of director in small and medium-sized companies. Executive Directors are actively involved in the company's daily operations and decision-making.
- Key Traits: Actively manages the business, attends meetings, hires staff, deals with clients.
- High legal responsibility — you are the face and operator of the company.
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2. Non-Executive Director
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Non-Executive Directors do not participate in daily operations. Instead, they attend board meetings, advise on company strategy, and offer independent oversight.
- Key traits: Advisor-like role, strategic input, no day-to-day involvement.
- Still has fiduciary duties and can be held accountable.
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3. Nominee Director
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A Nominee Director is appointed to act on behalf of someone else, typically used by foreign owners to fulfil local statutory requirements.
- Key Traits：Listed as director, but often with limited involvement or decision-making authority.
- Still legally responsible for the company’s affairs.
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4. De Facto Director
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A De Facto Director is someone who acts like a director even if they have not been officially appointed. For example, they attend meetings, make decisions, or manage staff.
- Key Traits：Not officially appointed, but behaves like a director.
- May be legally treated as a director and held liable.
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5. Shadow Director
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A Shadow Director influences decisions behind the scenes. While not officially named in any company documents, the board follows their instructions.
- Key Traits：Operates from the background, but board acts on their directions.
- Can be held responsible if proven to be the true decision-maker.
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6. Alternate Director
An Alternate Director is someone appointed to temporarily replace a director when they are unavailable, such as when travelling overseas.
- Key Traits：Acts as a stand-in, but with full director authority during the period.
- Responsible for decisions made while in position.
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Why Does This Matter?
Whether you're a founder, business partner, investor, or even someone who "just helped by lending your name" — if you’re involved in company decisions or operations, you may be considered a director in the eyes of the law. |
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