Non-executive Director appointment letter template
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Our Non-executive Director Appointment Letter template ensures a seamless onboarding process, providing a professional and legally compliant framework for successful appointments.
Why this letter is necessary
The purpose of a director's letter of appointment is to formally appoint a non-executive director to a company's board and to set out the terms and conditions of their appointment. This letter clarifies the rights and responsibilities of the director and sets out their obligations to the company.
It also protects the company's confidential information, intellectual property, and other assets. The letter provides a clear framework for the director's role and can help to prevent misunderstandings and disputes in the future.
Compliance notes
Here are some UK employment legislations that support the use of a director's letter of appointment:
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Companies Act 2006: This Act requires companies to have at least one director, and sets out the legal duties and responsibilities of directors, including the duty to promote the success of the company and act in its best interests.
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Employment Rights Act 1996: This Act sets out the minimum statutory rights that employees and directors are entitled to, such as the right to a written statement of terms and conditions of employment.
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Equality Act 2010: This Act prohibits discrimination on the basis of protected characteristics, such as age, race, gender, and disability. Companies are required to ensure that their recruitment and appointment processes are fair and non-discriminatory.
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Companies (Miscellaneous Reporting) Regulations 2018: These regulations require companies to report on their corporate governance arrangements, including the appointment and reappointment of directors.
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Corporate Governance Code: This code sets out best practice principles for corporate governance, including the appointment and role of directors. Many companies choose to follow this code voluntarily.
Overall, a director's letter of appointment helps to ensure compliance with these and other relevant employment legislations, by setting out the terms and conditions of the director's appointment in a clear and transparent manner.
Implementation timeline
| Step | Description | Responsibility | Timing |
| 1 | Selection and Decision | Board/Committee | As part of the selection process |
| 2 | Negotiation and Agreement | Board/Committee | 1-2 weeks |
| 3 | Draft Appointment Letter | HR/Legal | 1 week |
| 4 | Review and Approval | Legal/Management | 1-2 weeks |
| 5 | Issue Non-executive Director Appointment Letter | HR | 1 week before the start date |
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Specifications
5 mins
390 words, 2 pages A4
1 July 2024
[Company name]
[Sender address]
[date]
[Recipient name]
[Recipient address]
Dear [Recipient first name],
I am pleased to confirm your appointment to the board of directors of [Your Company Name] as a non-executive director with effect from [Appointment Date]. Your appointment has been approved by the board of directors.
This letter sets out the terms of your appointment.
Appointment
Your appointment is for a period of [Number of Years] years, unless terminated earlier in accordance with the provisions of this letter. Your appointment may be renewed at the end of the term subject to agreement between you and the board of directors.
Duties and Responsibilities
As a non-executive director, your duties and responsibilities will include:
- Contributing to the strategic development of the company;
- Providing independent and objective judgment;
- Bringing external experience and perspective to the board;
- Monitoring the performance of management;
- Ensuring appropriate risk management;
- Ensuring appropriate corporate governance; and
- Representing the company to shareholders, stakeholders, and the wider community.
Time Commitment
Your appointment is part-time and is expected to require approximately [Number of Days/Weeks/Months] of your time per year. This includes attendance at board meetings and committee meetings, as well as preparation time.
Remuneration
Your remuneration will be [Remuneration Details, e.g. Fixed Fee, Per Meeting Fee, or Other]. This will be reviewed on an annual basis.
Termination
Your appointment may be terminated by either party giving [Notice Period] written notice to the other party. The board of directors may also terminate your appointment immediately if you:
- Fail to attend three consecutive board meetings without a reasonable excuse;
- Are convicted of a criminal offence (other than a minor offence); or
- Engage in conduct that is prejudicial to the company or which brings the company into disrepute.
Confidentiality and Intellectual Property
You will be required to sign a separate confidentiality and intellectual property agreement. This is to protect the confidential information and intellectual property of the company.
Governing Law
This letter and your appointment as a non-executive director will be governed by and construed in accordance with the laws of [Governing Law]. Any dispute arising out of or in connection with this letter will be subject to the exclusive jurisdiction of the courts of [Jurisdiction].
If you accept these terms, please sign and return a copy of this letter to me.
We look forward to working with you and are confident that you will make a valuable contribution to the board.
Yours [faithfully | sincerely],
[Sender name]
[Sender job title]
[Sender telephone]
[Sender email]
[For, and on behalf of [Company name] ]
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