Directors Agreement Template for New Zealand

A Directors Agreement is a comprehensive legal document that formalizes the relationship between your company and its directors under New Zealand law. This contract establishes clear expectations, duties, and obligations while ensuring compliance with the Companies Act 1993 and related legislation. Whether you're appointing new directors or formalizing existing arrangements, this agreement provides essential legal protection and governance structure for your business.

When do you need this document?

You'll need a Directors Agreement when appointing new directors to your company board, whether they're executive or non-executive positions. This document becomes crucial during company restructuring, when bringing in external directors, or when transitioning from informal to formal governance structures. It's particularly important for companies seeking investment, as investors often require clear director agreements as part of due diligence. You'll also need this agreement when establishing subsidiary companies or when directors' roles significantly change within your organization.

Key legal considerations

The agreement must clearly define director duties under the Companies Act 1993, including the duty to act in good faith, exercise care and diligence, and avoid conflicts of interest. Remuneration clauses should specify fees, benefits, and reimbursement policies while ensuring compliance with disclosure requirements. Confidentiality provisions protect sensitive company information, while indemnity clauses outline the company's obligation to protect directors from personal liability when acting within their authority. Time commitment expectations, particularly for non-executive directors, should be clearly stated to avoid disputes. The agreement should also address termination procedures, including resignation, removal, and notice periods.

Legal requirements in New Zealand

Under the Companies Act 1993, all directors must meet eligibility requirements, including being at least 18 years old and not being disqualified from being a director. The agreement must incorporate statutory duties, including the duty to act in the company's best interests and comply with the Financial Markets Conduct Act 2013 for listed companies. Directors have personal liability obligations under the Health and Safety at Work Act 2015, which should be addressed in the agreement. The document must comply with disclosure requirements for director interests and related party transactions. For executive directors, employment law considerations under the Employment Relations Act 2000 may apply, requiring careful drafting to distinguish between director and employee roles. Privacy Act 2020 compliance is essential when handling director personal information.