Appointing a non-executive director
Non-executive director: As your business grows, you may see the need for a NED, or “non-executive director”. This would be when a company appoints a director to the board who is not an employee. A non-executive director is still a 'statutory' director, which means that they're subject to the same duties and obligations as any other director, including those that are employed by a company (known as 'executive directors'). To define this relationship, you would need to use a letter of appointment for a non-executive director.
Content of the appointment letter: This document template governs the relationship between a company and a non-executive director. It sets out when the relationship begins and how it can end, how the non-executive director will be remunerated (with options for payment of a fee or the issue of shares by way of 'sweat equity' that are subject to provisions enabling a company to recover shares if they cease to be appointed), the duties the non-executive director must perform and any restrictions or conditions imposed on them (for example, to prevent any conflict of interest).
Remember to inform Companies House: You'll also need to inform Companies House that you have appointed a new director within 14 days of their start date by filing a Form AP01.
When not to use this template: You shouldn't use this document for a director you'd like to engage as an employee - you should use a director's service agreement instead.
Created by lawyers: Docue’s appointment letter template is lawyer-made, lawyer-maintained, and has lawyer-crafted guidelines to steer you through every stage of drafting your document. If you do get stuck, Docue’s lawyers will be able to provide real-time support via instant chat.
Easy to use: To create your letter of appointment with confidence and speed, simply click through the intelligent tick box options and text box answers and you’ll have a comprehensive, tailored, and ready-to-use letter in no time. Once you are all done, you can leverage Docue’s unlimited and automatic storage to keep your appointment letter safe and sound.