Letter of appointment for a director
- Minimise the risk of future disputes or legal claims against your business
- Provides the terms and conditions of a director's appointment
- Contains all the legal terms you need
Use this Director’s letter of appointment to appoint a director to your board who is not an employee. Such a director is also referred to as a non-executive director.
Using a formal letter of appointment helps to protect your company’s confidential information, intellectual property, and more. It clarifies the rights and responsibilities of the director and sets out the director’s obligations to the company.
This Director’s letter of appointment also gives you flexibility to terminate the directorship and/or deal with the director’s resignation if they are not cooperating.
By using this Director’s letter of appointment, you ensure that the new director and the company are clear about the terms and conditions of their appointment and what their responsibilities and obligations are. This letter also helps to show the relationship is not an employment relationship, which can prevent costly disputes or legal claims against your company in the future.
Q&A
When should I use this document?
You should use this document if you are appointing a new director, to set out the terms and conditions of their appointment. You can also use this letter if you have already appointed a director and you want to clarify their terms and conditions retrospectively.
What does this document cover?
This Director’s letter of appointment covers a wide range of terms that are important for setting out the relationship between the director and the company. Examples of such terms are:
- allowing the company to deal with the director’s resignation if the director fails to cooperate;
- confirming that the relationship is not an employment relationship and bonuses and pensions will not be paid;
- setting out the director’s start and end dates;
- providing the ability for the company to terminate their directorship;
- setting out the director’s key responsibilities and obligations to the company (such as time required for preparing for board meetings and a requirement to obtain the board’s approval before taking on other commitments that might affect their role as director);
- providing for fees, expenses and insurance; and
- protecting the business’s confidential information and intellectual property.
Why do I need this document?
You need this document to protect your business and to make sure that the directors and company are clear about the roles and responsibilities of a new director. Having the appropriate terms and conditions set out in writing helps to minimise the risk of disputes and/or legal claims being taken by the director against your business in future.
Where can I find out more?
You can find further guidance on appointing directors at Directors’ agreements.
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