Director service agreements

Solicitors for director service contracts

A clear and well drafted director service agreement ensures clarity and mitigates risk. Our specialist lawyers provide experienced and cost effective advice for companies and directors (whether executive or non-executive directors) including :-

• Drafting or reviewing agreement - ensuring you get the right agreement for your specific needs, addressing issues such as duties, responsibilities, remuneration, and termination.

• Negotiate key terms for employer or director - including compensation packages, share options, and restrictive covenants.

• Corporate Governance best practice - ensuring that your director agreements comply with relevant corporate governance codes and regulations.

Please do get in contact by phone or email to discuss how we can help you.

Key matters to consider and potentially include in a Director Service Agreement

Directors may or may not be employees. If they are employees, a standard employment contract will be unlikely to adequately protect either the director or the company. This is due to the fact that directors are in a key role in a limited company, with significant power and day to day control.

• Duties and Responsibilities – set out clearly the specific work duties and responsibilities of the director together with specific duties over and above general duties of directors set out in the Companies Acts.

• Term and Termination - Clearly define the duration of the agreement and the grounds for termination, including both voluntary resignation and termination by the company. Consider also specific termination clauses where the director is also a shareholder and comprehensive good leaver and bad leaver clauses.

• Remuneration and Benefits - Specify the director's salary, bonuses, other forms of compensation, and any applicable benefits, such as pensions or health insurance. Other benefits a director may push for include being indemnified under a Director and Officers insurance policy (D & O policy)

• Confidentiality and Non-Competition – Key to protect the company's proprietary information and prevent the director from engaging in competing activities both during the time he/she is a director and for a period afterwards. These clauses always need to be carefully considered, proportionate and well thought through, as otherwise they may not be enforceable.

• Intellectual Property -clarifying the position on ownership and usage rights of any intellectual property which the director may have been involved in creating during their tenure.

• Conflicts of Interest – a clear policy and expectations on what constitutes a conflict of interest so that any outside interests do not conflict with the director's duties to the company.