UK Director Service Agreement - Editor

Director Service Agreement Editor

Fill in the details below to generate your customized UK director service agreement

🏢 Parties to the Agreement

Find at Companies House

👔 Appointment Details

? Executive directors are employees with operational roles. Non-executive directors provide independent oversight and strategic guidance without day-to-day involvement.

📅 Term & Termination

? Fixed term has a specific end date. Indefinite continues until terminated by either party. Most director appointments are indefinite with notice periods.
? Directors typically have longer notice periods (3-6 months) than employees. Must be same for both company and director unless there's a specific business reason for difference.

📋 Duties & Responsibilities

Directors' Statutory Duties: All UK directors must comply with Companies Act 2006 duties including: act within powers, promote company success, exercise independent judgment, exercise reasonable skill and care, avoid conflicts of interest, not accept benefits from third parties, and declare interest in transactions.
? Be specific about the director's operational and strategic responsibilities. For executive directors, include management duties. For non-executive directors, focus on governance and oversight.
? Directors must attend board meetings. Specify minimum attendance requirements and whether attendance can be by phone/video.
? Executive directors typically work full-time. Non-executive directors usually commit specific days per month (e.g., 2-3 days per month).

💷 Remuneration

? Executive directors typically receive salary. Non-executive directors often receive fees. Some may receive both salary and fees depending on structure.
? Many directors receive performance-based bonuses or share options. Specify criteria, targets, and payment terms clearly.
? Directors may receive share options, restricted shares, or other equity incentives. These should have clear vesting schedules and exercise conditions.
? Common director benefits include: company car, private health insurance, life insurance, pension contributions above minimum, professional subscriptions.

💳 Expenses

Directors are entitled to reimbursement of reasonable business expenses properly incurred in the performance of their duties.

🏖 Holiday Entitlement

? Directors who are also employees are entitled to statutory minimum of 28 days (including bank holidays). Many directors receive 25-30 days plus bank holidays. Non-executive directors typically don't have formal holiday entitlement.
Plus bank holidays (8 days)

🦺 Pension

? Executive directors who are employees must be auto-enrolled (minimum 3% employer contribution). Many companies offer enhanced contributions for directors (5-15%). Non-executive directors are typically not eligible for pension schemes.

🔒 Confidentiality & Intellectual Property

Directors' Fiduciary Duties: Directors owe fiduciary duties to the company including duties of confidentiality and to act in the company's best interests. These apply during and after the directorship.
? Directors have access to highly sensitive company information. High level confidentiality provisions are standard, covering all strategic, financial, and commercial information indefinitely.
? Any IP created by the director in the course of their duties belongs to the company. This is standard and essential for directors.
Standard provision for directors

⚖️ Post-Termination Restrictions

Important: Post-termination restrictions on directors must be carefully drafted to be enforceable. Courts scrutinize these heavily. Restrictions should be reasonable in duration (typically 6-12 months) and scope.
? Restrictive covenants prevent the director from competing, soliciting clients/staff, or joining competitors after leaving. Must be reasonable to be enforceable. Typically 6-12 months for directors.
? Garden leave allows the company to require the director to stay away from work during their notice period while still being paid. This is common for directors to protect sensitive information.

🛡️ Indemnity & Insurance

Directors' Liability: Directors can be personally liable for certain breaches of duty. Companies typically provide indemnity insurance (D&O insurance) to protect directors, which is permitted under Companies Act 2006 with certain limitations.
? D&O insurance protects directors from personal liability for claims arising from their decisions and actions. This is standard and highly recommended for all directors.
? Company may indemnify directors against certain liabilities (within legal limits). Cannot indemnify for fraud, dishonesty, or breach of duty to the company.

👥 Other Directorships & Interests

? Directors must disclose conflicts of interest. Companies often restrict directors from holding directorships in competing companies. Non-executive directors typically have portfolio of directorships.

⚠️ Termination & Removal

Important: Directors can be removed by shareholders via ordinary resolution (50%+ vote) with special notice under Companies Act 2006 s.168. The service agreement should specify additional grounds for termination by the company.
? Events allowing the company to terminate immediately without notice or payment. These should include serious breaches and conduct incompatible with directorship.

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⚖️ Qualified Legal Professional Expert-Reviewed Director Service Agreement Template

This agreement has been carefully drafted and reviewed by a qualified legal professional. It provides a strong legal foundation but is not a substitute for personalised advice. Your purchase includes lifetime access to this document via our secure online portal, with free updates for 12 months. For tailored guidance and complete peace of mind, you can book a consultation with one of our legal professionals here.

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