A shadow director is a person who has the power, authority and influence on the company. He or she gives instructions and guidance for the business. On the other hand, the objectives that they set out can only be adopted as a set of voluntary principles. Formal directors cannot benefit from the statutory protections which their shadow counterparts lack. They are not engaged in the company's management structures as they are not even statutory directors of the company. A number of shadow directors are blissful regarding their rights and obligations. Liability insurance for the company directors and officers will not be effective for shadow directors which means they could face huge fines for any errors.