Agreement Between Directors Of A Company Template for Hong Kong

An Agreement Between Directors Of A Company is a critical governance document that establishes the framework for how board members work together and fulfill their duties under Hong Kong law. This agreement creates binding obligations between directors while ensuring compliance with the Companies Ordinance (Cap. 622) and local corporate governance standards. You'll need this document to formalize director relationships, clarify responsibilities, and establish clear decision-making processes that protect both your company and individual directors.

When do you need this document?

You should implement this agreement when your Hong Kong company is transitioning from informal to professional governance structures, particularly as you scale operations or bring in external investors. It's essential when appointing new directors to an existing board, whether they're independent non-executive directors or additional executive directors. Companies preparing for listing on the Hong Kong Stock Exchange often require this agreement to demonstrate robust governance frameworks. You'll also need it when existing directors want to clarify their roles, resolve potential conflicts about authority, or establish formal procedures for board meetings and decision-making. Professional service firms, family businesses transitioning to corporate structures, and companies with multiple founder-directors frequently use this agreement to prevent disputes and ensure smooth operations.

Key legal considerations

Your agreement must clearly define each director's fiduciary duties under Hong Kong law, including duties of care, loyalty, and good faith toward the company. Include specific provisions for managing conflicts of interest, as directors must disclose personal interests in company transactions and may need to recuse themselves from relevant decisions. The agreement should establish board meeting procedures, voting mechanisms, and quorum requirements that comply with your company's articles of association. Consider including confidentiality clauses to protect sensitive company information and non-compete provisions where legally enforceable. Address director remuneration, expense reimbursement, and indemnification arrangements clearly. Include termination procedures that respect both the agreement terms and Companies Ordinance requirements for director resignation or removal.

Legal requirements in Hong Kong

Under the Companies Ordinance (Cap. 622), your agreement must respect statutory director duties and cannot override mandatory legal obligations. Directors have non-delegable duties to act in good faith, exercise reasonable care and diligence, and avoid conflicts of interest. The agreement must comply with your company's articles of association and cannot contradict statutory requirements for board composition, meeting procedures, or decision-making authority. For listed companies, ensure compliance with the Securities and Futures Ordinance (Cap. 571) regarding directors' dealings and disclosure obligations. The Corporate Governance Code provides additional guidance for listed companies on board independence and effectiveness. Your agreement should incorporate these regulatory requirements while providing practical frameworks for day-to-day governance. Consider how the Contract Ordinance (Cap. 26) governs the enforceability of agreement terms and ensure all directors have legal capacity to enter binding commitments.