Directors’ Terms Of Service

Abstract

Abstract The terms of service of a director will usually be a matter for negotiation between the parties and incorporated within a written service agreement. The Companies Act imposes certain restrictions and controls upon directors’ service agreements, which are discussed in Chapter 18. Chapter 26, Section C discusses the rules requiring quoted companies to disclose details of directors’ remuneration in a directors’ remuneration report, which must be approved by the members. This chapter considers the rights and duties of directors which result from their contractual obligations, as opposed to the general duties (as now codified within the 2006 Act) which are discussed in Chapters 10 to 17. It examines the tests that the courts will apply to determine whether a director is employed under a service agreement, together with the sources of contractual rights. It also considers the typical contractual rights and restrictions that apply in service agreements, including the rights to remuneration and expenses, confidentiality, and post-termination restrictions.