Director's Service Agreement

A director's service agreement does more than a standard employment contract. It is addressing the dual capacity of an individual who is both an employee (with employment rights and obligations) and an officer of the company (with statutory directors' duties).

Why directors' agreements work harder than employment contracts

The drafting points that matter most are: the scope of authority and any limits on it; remuneration, including bonus and any equity arrangements; the relationship with any shareholders' agreement provisions on board composition; restrictive covenants calibrated to a senior departure; and the termination mechanics, including how the director's officeholder role ends alongside the employment.

For listed and PE-backed companies there are further governance considerations. For private companies, the document is often where the founder's deal gets formalised. It deserves more attention than a standard employment template would give it.

A well-drafted service agreement protects both the company and the director by making the terms of the appointment clear from the outset.

Example: a typical scope and fixed fee

For an executive director who is also an employee of a private company, the typical scope looks like this.

What's included

• A consultation to understand the director's role and remuneration arrangements
• Drafting of a director's service agreement covering duties, time commitment, remuneration, benefits, expenses, confidentiality, IP, restrictive covenants, and termination
• One round of revisions based on your feedback
• Final version ready to use

What's outside this scope

• Non-executive director appointment letters
• Board minutes or shareholder resolutions to approve the appointment
• Tax advice

Fixed fee: £550, no VAT.

How I will approach your matter

Once you have instructed me, I will arrange a consultation to understand the director's role and remuneration arrangements before drafting. The agreement will fit the dual capacity properly. Covering the employment-law dimensions and the company-law dimensions in a way that does not contradict the company's articles or any shareholders' agreement.