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 to set out the terms of the appointment.
What does this non-executive director contract template include?
Content of the appointment letter: This non-executive director contract template governs the relationship between a company and a non-executive director. The non-executive director contract template 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).
What else do I need to do when I appoint a director?
Remember to inform Companies House: You'll also need to inform AP01 that you have appointed a new director within 14 days of their start date by filing a Form AP01.
When should I use a different template instead?
When not to use this template: You shouldn't use this non-executive director contract template for a director you'd like to engage as an employee - you should use a director's service agreement instead. Find out more about the differences between executive and non-executive directors here.
Why Docue?
Created by lawyers: Docue’s non-executive director contract template is lawyer-made, lawyer-maintained, and has lawyer-crafted guidelines to steer you through every stage of drafting your document.
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.
Full contract solution: Docue’s cutting-edge technology combined with our lawyer-made content allows you to create, customise, e-sign, store and manage your contracts all in one place, Docue Drive.
Tags: non-executive director contract template, letter of appointment of non-executive director, non-executive director appointment, NEDs
