Company Director Agreement Template for England and Wales

A Company Director Agreement is an essential legal contract that formalises the appointment and working relationship between a company and its director. Under England and Wales law, this agreement ensures compliance with the Companies Act 2006 while establishing clear terms for the directorship arrangement. Whether you're appointing a new director or formalising an existing relationship, this document protects both parties and provides legal certainty for the directorship.

When do you need this document?

You need a Company Director Agreement whenever appointing a new director to your company board, whether they're an executive director with day-to-day management responsibilities or a non-executive director providing strategic oversight. This agreement is particularly crucial when the director will receive remuneration, benefits, or equity participation, as it clearly defines these arrangements. Family businesses often require this document when bringing in professional directors or when family members take formal director roles. Listed companies and those seeking investment typically need comprehensive director agreements to demonstrate corporate governance compliance. The agreement is also essential when directors have dual roles as both director and employee, ensuring both relationships are properly documented and legally compliant.

Key legal considerations

The agreement must clearly define the director's statutory duties under sections 171-177 of the Companies Act 2006, including duties to act within powers, promote company success, exercise independent judgment, and avoid conflicts of interest. Remuneration clauses require careful drafting to ensure compliance with company law requirements for director payment approval and disclosure. Confidentiality and non-compete provisions must be reasonable and enforceable, particularly given the director's fiduciary position and access to sensitive information. The document should address potential conflicts of interest and establish procedures for declaring and managing such conflicts in accordance with company law. Termination provisions must account for both resignation and removal procedures, including notice periods, garden leave arrangements, and post-termination restrictions that protect company interests without being overly restrictive.

Legal requirements in England and Wales

Under the Companies Act 2006, all director appointments must be properly documented and filed with Companies House, with the agreement supporting these statutory filings. The document must ensure compliance with the UK Corporate Governance Code where applicable, particularly for listed companies regarding director independence and board composition. Employment law considerations apply when directors are also employees, requiring adherence to the Employment Rights Act 1996 regarding notice periods, unfair dismissal protection, and basic employment rights. The agreement must incorporate Equality Act 2010 provisions ensuring non-discriminatory treatment and equal opportunities. Data protection obligations under GDPR must be addressed, particularly regarding director personal data processing and confidentiality requirements. The Small Business, Enterprise and Employment Act 2015 provisions on director disqualification must be considered, ensuring the agreement doesn't conflict with these regulatory requirements.