Section 176(10A) of the Companies Act 1965 now allows the majority of creditors of a company under a scheme of compromise or arrangement to nominate a director. This paper takes a look at the current law in Malaysia relating to the duties and functions of nominee directors and concludes that all directors, including nominee directors, must act in the best interests of the company. This places nominee directors appointed pursuant to sub-section (10A) in a conflict situation. The author proposes that any doubt relating to the functions and duties of the nominee director appointed pursuant to the sub-section be clarified by legislation. The author also suggests that interested parties should take sufficient care to ensure that the court, when appointing the nominee director, specifies his or her functions, rights and duties.