What is a Director’s Service Agreement?
A Director’s Service Agreement is a type of employment contract between the company and the director.
Why do I need a Director’s Service Agreement?
Firstly, as an employer, a company must give the director important information about their employment. Both the company and the director to understand and agree the director’s role.
Secondly, having a written agreement makes this much easier and clearer. It means you can explain:
- Basic information – like the director’s hours of work, salary.
- What’s expected from the director – their duties and responsibilities.
- Arrangements for things like sickness and holidays.
- What happens if things go wrong – discipline and grievance.
- Ending the relationship – including notice periods and payment.
- Protecting the company by explaining what a former director can and can’t do once they’ve left.
- The Director’s legal responsibilities.
What’s in the Director’s Service Agreement?
This agreement comes with notes and guidance. You can tailor it to meet the needs of your company. It’s WORD document so it’s easy to customise. It includes:
- Duties – including Job Performance obligations and statutory duties.
- Basic information such as hours of work, pay, expenses and other benefits.
- Holiday, sickness and disciplinary.
- Intellectual Property Protection.
- Data Protection and confidentiality.
- Termination of the agreement.
- Restrictive covenants – what the director can and can not do after they have left the company
Need other documents?
Don’t forget, your director is an employee so you need an employee handbook.
If your director is a shareholder, you need a Shareholders’ Agreement.