Essentially a contract of employment, a suitable director’s service agreement is a necessity to regulate their position as an officers and, more often than not, employee of the company.
If directors are also employees, it is necessary for the company to comply with employment legislation, as well as company legislation. Accordingly, from both an employment perspective and a corporate governance perspective, a correctly drafted and robust director’s agreement should be in place for each director of your company to ensure that the basis of the relationship and the rights and obligations of the director and the company are clear to all.
A director’s agreement may include provisions relating to:
- Details of working hours and place of work;
- Details of the director’s position – executive or non-executive director;
- remuneration, including salary and benefits (in particular bonus schemes, share incentive plans and clawback measures);
- Director’s duties;
- Termination provisions;
- Confidentiality and intellectual property rights/protections; and
- Restrictions on a director after the relationship comes to an end (Restrictive covenants).
Our employment law specialists here at Butcher & Butcher have advised on, drafted and negotiated many director’s agreements. We will discuss your requirement, ascertain your needs and producing an agreement that addresses them.