What are the risks of appointing a nominee director?

The risks sit on both sides. The nominee remains a legal director with full statutory duties, so a professional nominee will carry out due diligence and will not stay on a board that is used for unlawful activity. For the company, the real risk is the informal route: using a friend as your nominee director who does not understand the duties, or an unregistered provider, which can now attract penalties. A CSP-arranged appointment with a defined non-executive scope and proper ROND filings removes most of that risk.