Director Services Agreement Template for Pakistan

A Director Services Agreement is a legal contract between a company and its director that spells out their roles, responsibilities, and compensation. In Pakistani companies, these agreements are crucial for establishing clear terms of engagement, especially under the Companies Act 2017 and SECP regulations.

The agreement typically covers key aspects like board meeting attendance, strategic planning duties, confidentiality requirements, and the director's remuneration package. It protects both parties by clearly defining performance expectations, conflict of interest policies, and termination conditions - making it an essential tool for corporate governance in Pakistani businesses.

Use a Director Services Agreement when bringing new directors onto your Pakistani company's board, especially for listed companies regulated by SECP. This agreement becomes essential during leadership transitions, corporate restructuring, or when appointing independent directors who need clear terms of engagement.

Many companies implement these agreements after facing governance challenges or stakeholder disputes about director responsibilities. It's particularly valuable when directors hold multiple board positions, handle sensitive information, or receive performance-based compensation. Having this agreement in place before conflicts arise helps prevent misunderstandings and protects both the company and its directors.

• Executive Director Agreement: Used for full-time directors involved in day-to-day operations, with detailed performance metrics and executive compensation terms
• Non-Executive Director Agreement: Focuses on oversight duties, board meeting attendance, and committee responsibilities for part-time directors
• Independent Director Agreement: Contains specific provisions for maintaining independence under SECP regulations, including conflict disclosure requirements
• Technical Director Agreement: Tailored for directors providing specialized expertise, with detailed scope of technical responsibilities
• Nominee Director Agreement: Designed for directors representing specific shareholders or stakeholders, with clear reporting obligations

• Board of Directors: Reviews and approves the final agreement, ensuring it aligns with company strategy and governance needs
• Individual Directors: Sign and comply with the agreement's terms, including confidentiality and performance obligations
• Company Secretary: Drafts initial agreements, maintains records, and ensures SECP compliance
• Legal Counsel: Reviews terms, suggests modifications, and ensures compliance with Pakistani corporate law
• SECP Officials: Monitor compliance with regulatory requirements, especially for listed companies
• Shareholders: May need to approve certain terms, particularly regarding director compensation and benefits

• Company Details: Gather registration number, registered office address, and business activities
• Director Information: Collect biographical data, qualifications, and any existing directorships
• Role Specifics: Define exact responsibilities, reporting lines, and performance expectations
• Compensation Package: Detail salary, benefits, meeting fees, and any performance-based incentives
• Term Details: Specify appointment duration, renewal conditions, and termination clauses
• Compliance Requirements: Check SECP regulations and Companies Act provisions for director appointments
• Board Approval: Ensure all terms align with company policies and get necessary authorizations

• Parties and Roles: Full legal names, company details, and director designation
• Appointment Terms: Duration, effective date, and position specifications
• Duties: Board meeting attendance, strategic oversight, and fiduciary responsibilities
• Compensation: Remuneration structure, benefits, and expense reimbursement policies
• Confidentiality: Protection of company information and trade secrets
• Conflict of Interest: Disclosure requirements and handling procedures
• Termination Clauses: Notice periods, grounds for termination, and post-termination obligations
• Governing Law: Reference to Pakistani Companies Act 2017 and SECP regulations

A Director Services Agreement differs significantly from a Director Appointment Agreement. While both documents relate to directors' roles in Pakistani companies, they serve distinct purposes and contain different elements.

• Scope and Detail: Director Services Agreements are comprehensive documents covering ongoing duties, compensation, and performance metrics, while Appointment Agreements focus mainly on the initial appointment process and basic terms
• Legal Requirements: Appointment Agreements fulfill SECP's mandatory documentation for director nomination, while Services Agreements expand on operational aspects and expectations
• Duration Focus: Services Agreements govern the entire service period with detailed terms, whereas Appointment Agreements primarily address the commencement of directorship
• Content Depth: Services Agreements include detailed provisions for confidentiality, non-compete clauses, and performance evaluation, which are typically absent in basic Appointment Agreements