Directors in most businesses wear two or three ‘hats’, that of statutory director, employee and sometimes also shareholder. Although the roles often blur in practice they remain distinct roles with distinct legal regimes attached.
With their ‘employee’ hat on it is vital that businesses take care to protect themselves as they would with any other employee. Indeed it is often more important to take additional care to ensure that extra protection is included within the director’s employment contract due to the high level of confidential information and client/employee relationships they will be exposed to.
A directors service agreement helps provide that protection by setting out not only the basic employment conditions of the director but also additional protections such as confidentiality clauses, provisions relating to intellectual property and restrictive covenants.
As well as providing these protections the directors service agreement can also be a useful tool for helping to attract talented directors, setting out additional benefits and entitlements such as to enhanced sick pay, life or medical insurance, bonuses and commissions as well as linking with share option agreements.
How can we help you?
If you are recruiting a director or do not currently have a directors service agreement for your directors Nockolds Employment Team have extensive experience in drafting, negotiating and finalising these agreements.