A non-executive director agreement is a contract between a company and an individual who has been appointed as a non-executive director of the company. The agreement sets out the terms and conditions of the appointment, including the duties and responsibilities of the non-executive director, the remuneration, and the length of the appointment.
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This Agreement is suitable for large companies that appoint NEDs.
The specific type of NED appointed is an Independent NED, as identified by the UK Corporate Governance Code. It is envisioned this will account for the majority of NEDs appointed in companies.
The NED is hired under PAYE, and paid monthly in arrears for the days worked. In this manner, the NED can work a varying amount each month depending on company needs.
Despite this, strict provisions are provided as to what is expected of the NED.
The Agreement is structured as an employment letter, but signed as a deed.
Because the payment structure is monthly in arrears, it is important to track when the NED actually works and pay this accordingly each month. Alternative fee structures could also be implemented.