Service agreement for a director

This director's service agreement is appropriate for use when your director is to be an employee of your company. Director/employees are also known as executive directors.

For non-executive directors the legal requirements are different - see our Directors' letter of appointment instead.

This service agreement for a company director is designed to work with our Staff handbook and policies.

It includes:

• basic information that you are legally required to give to employed directors (pay, hours etc);

• provisions preventing the director from being a director of another business without your agreement;

• reminders of key duties that the director owes, eg to tell the board about possible conflicts of interest and to act in your company's best interests; and

• protections for your business to safeguard confidential information, intellectual property etc if the director leaves.

It is essential that any employed directors are clear about the terms under which they are working for you. Directors in particular are likely to have a lot of power and influence within your company, which similarly means they are able to do a lot of damage if things are not run well, or if they leave and want to work with or set up a competing business.

Having a properly written service agreement for your directors will help you avoid these sorts of problem down the line.

For detailed Q&A guidance, including the process for approving your director's service agreement, and the record keeping associated with it, see Directors' agreements.