Intercompany financial guarantees play a significant role in both accessing finance for borrowers and as a security mechanism for lenders. Directors are responsible for authorizing the issuance of guarantees and are required to understand the legal- and accounting complexities when guarantees are issued. Court cases have demonstrated that directors fail to perform their fiduciary duties when issuing intercompany guarantees. Corporate governance, consisting of laws such as companies’ Acts and codes of corporate governance, provides guidance and processes to enable directors to fulfil their fiduciary duties. This study aims to demonstrate that there is insufficient guidance provided to directors in the UK Corporate governance system on directors’ fiduciary duties when issuing intercompany guarantees. This study employs a comparative analysis of the UK and South African corporate governance systems because the objective test requirement as per the Companies Act 71 of 2008 (South Africa) might overcome shortcomings in the UK corporate governance system. This study demonstrates that directors authorize for companies to provide financial guarantees, without understanding the legal- and accounting requirements.