The US$111 million judgment passed down against the directors of a Cayman fund in August 2011 caused stakeholders to pause and consider what is the appropriate structure for their boards of directors and whether existing corporate governance models are sufficient.

As expected, the case discussed the delegation of tasks by directors to service providers and the responsibility of the directors to monitor and supervise delegates. The failure to do this and to exercise independent judgment led to a corporate governance disaster.

In anticipation of such a disaster, the attached presentation was initially prepared for, and presented to, “new starts” at a top 5 global administrator in July 2011.  It is now being made available here to assist stakeholders to understand the actual role of an offshore director and where he/she sits in the fund structure.  I trust that you find this presentation helpful.

About the author:

Alric Lindsay is an independent fund director and provides independent directorship services to Cayman Islands based investment funds. His bio can be found on www.lindsay.ky. He can be contacted at alric@lindsay.