Director's Service Agreement
Director's Service Agreement
This Director's Service Agreement (the "Agreement"), effective [effective date] sets out the terms on which you will serve as a statutory director and senior executive of [company name], as well as constituting your contract or employment. It replaces and supersedes any prior employment particulars or informal arrangements.
This agreement is given in compliance with the Companies Act 2006 and applicable employment legislation.
Parties
This Agreement is entered into between:
[company name], a company incorporated in England and Wales with company number [company number] and registered office at [company registered office address] (the "Company"); and
[director name], residing at [director address] (the "Director" or "you").
Appointment and term
Your appointment as an executive director of the Company will commence on [start date]. This Agreement remains in effect until terminated by either party in accordance with the terms set out below.
Your employment under this Agreement is separate from your office as a statutory director of the Company. Nothing in this Agreement confers any right on you to continue to hold the office of director, which may only be terminated in accordance with the Company’s Articles of Association or applicable law. Termination of your employment does not automatically terminate your office as a director, but you are required to resign that office in accordance with the “Resignation as director” clause.
Continuous employment
Choose either option:
No employment with any previous employer will count towards your continuous employment.
Or
Your prior period of employment with [previous employer] from [previous start date] to [previous end date] will count towards your continuous employment for statutory purposes.
Duties and responsibilities
You agree to perform your statutory duties under the Companies Act 2006, including sections 171–177 and the duties to:
Act in the Company’s best interests.
Exercise reasonable care and skill.
Exercise independent judgment in all decisions.
Avoid conflicts of interest
Disclose any personal interest in company transactions.
Promote the success of the company.
You will report to [direct report]. Your responsibilities include [director responsibilities]. You also agree to comply with all relevant laws and regulations and the Company's Articles of Association and governance policies, and to attend board and committee meetings as required.
Your job description may be amended by the Company and, in addition to duties set out in the job description, you may be required to undertake additional or other reasonable duties as necessary to meet the needs of the Company's business.
Any equipment or materials provided to you remain the property of the Company and must be used only for business purposes unless otherwise approved.
Remuneration
Your annual remuneration will be [annual remuneration], payable [payment frequency] in arrears.
You may also be eligible for discretionary benefits as set out in this Agreement.
Expenses
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About this template
What is this template?
This document is a hybrid contract that manages both the corporate office of a director and the contractual employment of a senior executive. It contains statutory director warranties, fiduciary duty acknowledgments, and complex post-termination restrictive covenants that are not found in standard employee contracts. It is not a non-executive director letter of appointment, as it includes full employment terms and salary provisions.
When should you use it?
Use this when hiring a board-level director who will also have daily management responsibilities as an employee. If the individual is joining the board without becoming an employee, use a Letter of Appointment for a Non-Executive Director instead.
What's inside
| Clause | Name | What it does |
|---|---|---|
| 2 | Appointment and term | Separates the role of statutory director from the role of employee, requiring formal resignation of the directorship upon employment termination. |
| 3 | Duties and responsibilities | Obliges the Director to comply with statutory duties under sections 171–177 of the Companies Act 2006, including independent judgment and conflict disclosure. |
| 6 | Working hours | Requires the Director to opt out of the 48-hour maximum average working week prescribed by the Working Time Regulations 1998. |
| 11 | Enhanced pension | Provides for a specific percentage of basic salary to be contributed into a qualifying pension scheme beyond statutory auto-enrolment requirements. |
| 14 | Garden Leave | Permits the Company to exclude the Director from the office and restrict board voting while maintaining full salary and contractual obligations. |
| 21 | Restrictive Covenants | Imposes a 3-month non-compete and 12-month non-solicitation period regarding customers and senior employees after the termination of the agreement. |
Who it's for
- a UK company appointing an individual to serve as both a statutory board director and a senior executive
- an executive director requiring a contract that incorporates fiduciary duties under the Companies Act 2006
- a company seeking to impose post-termination non-compete and non-solicitation restrictions on a senior leader
How long it runs and how it's signed
Law it's drafted under
England & Wales note
This version is drafted for England & Wales. Scotland and Northern Ireland differ on some points — for example notice periods and tribunal procedure. Tell GitLaw where you hire and it adjusts the draft.
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