Director’s Service Agreements

A Director’s Service Agreement should include all of the things that would be included in a Contract of Employment as well as other requirements such as:
• Restrictions
• Bonuses
• Compliance with Articles of Association
• Resignation provisions covering things like shares and share options, gardening leave and resignations from office
• Restrictions on things such as involvement in other businesses
• Obligations to admit any actual or potential conflict of interests to the board
They should be tailored to the specific needs of a business when hiring or appointing a director, with a level of detail that is not usually found in more basic forms of employment contract.

It’s not legally essential to have a Director’s Service Agreement, but it is strongly recommended for clarity between both business and director. The main benefit of using one is being able to clearly state what the director’s specific rights and responsibilities are.

Director’s Service Agreements are essentially a Contract of Employment but for Directors. They usually include more detail than would be included in a regular Contract of Employment such as the things previously listed in the “What should be included in a Director’s Service Agreement?” section.