In simple terms, if I give a PG to a bank for the debts of my company I'm effectively giving the bank access to my personal assets if my company can't repay the debts when required to do so. A PG is one of the ways by which the 'limited liability' benefits of using a limited company can be lost, allowing the bank to 'reach around' the company and take my assets, rather then being limited to the company's assets. They're generally given to a bank when the bank's lending money to the company, either repayable as a term loan or as an overdraft. Of the three cases that I've come across lately, two of the PGs were given in support of term loans and one was in support of an overdraft (which is really a loan with a potentially very short term, as all overdrafts are repayable on demand if the bank suddenly wants its money back).
In all three cases, the person who gave the PG subsequently left the company for perfectly legitimate reasons but didn't take any steps to get the bank to release the PG. Having said that, it may well have been a futile exercise anyway as the bank will only release a PG if either (i) the guaranteed debt has been repaid; or (ii) the bank can obtain sufficient security from elsewhere. For example, if there are two or more co-guarantors, the bank may release one of them if the others between them have sufficient assets to cover the value of the debt. That's a matter for the bank at the time someone asks for a release and the bank may well release one of the guarantors if the others have deep enough pockets.
A common mistake, however, is for the director who gave the PG to assume that the PG liability automatically falls away when he/she ceases to be a director, often when the company is being sold. That is simply not the case, and unless the bank specifically releases the guarantee in writing, the potential liability continues. If the PG was granted properly, if the guarantor was separately advised at the time of the guarantee and if there hasn't been some subsequent significant change in the company's bank debt of which the guarantor was unaware, then the grounds for resisting a PG claim are extremely limited. The process usually ends up with a deal being done after a spot of horse-trading but at the end of the day the banks will quite happily enforce their PGs through the courts as their costs of enforcement will also be covered by the PG.
Clearly in the commercial world in which we live, PGs will frequently be required and given as part of a company's funding package. They're a necessary evil and they aren't going to go away. However, what I would say is that if you’re a company director who's given a PG and your directorship is coming to an end for any reason, please speak to your lawyer about whether there may be scope for reducing or eliminating your liability. The bank won't forget about it even if you do.