Is it considered bad from a corporate governance perspective to have a director be a significant shareholder?
In theory, it is good for directors to also be shareholders, as it gives them the incentive to make sure the company acts in the best interest of shareholders (as they are themselves shareholders). That’s why in practice, the majority of companies tend to give their directors shares). Now, in most cases, we are talking about directors owning a few shares, usually not in excess of a few percentage points. Your question asks about what happens if a director ends up with a big chunk of shares. It could be that he/she has even more of an incentive to behave in the best interests of shareholders in general (which is good), but it could also lead to other corporate governance problems (which can be bad). For example, this major shareholder/director might end up acting to the detriment of minority shareholders. One of the issues, which can also help you understand the potential risks, is to determine why a director is a significant shareholder.