Director IDs are being introduced with the intention to prevent the use of false director identities. A Director ID will allow regulators to monitor the activity of directors (as opposed to the activity of the organisation only) and their relationships with companies over time. These efforts will assist to identify and cease unlawful involvement with organisations, such as illegal phoenix activity.
Phoenix activity refers to when a company is liquidated, wound up or abandoned to avoid paying outstanding debts and a new company is then started to continue similar business activities without the burden of debt.