Director's Service Contract

A Director's Service Contract is an agreement between a company appointing a new director ("appointing company") and a newly appointed director outlining the terms of the director's service.

A director is a party responsible for making key decisions for the company. The role of the director is to oversee the management of the company and represent the company's best interest.

Note: Both individuals and registered organizations can become directors of a company. In the case where a director is an entity or organization, one person will be selected to represent the organization on the company's board of directors.

This agreement outlines the terms and conditions governing the director's service, including the role of the director, duties, director's compensation, and other relevant details.

This document provides the following key components:

• Appointment and Position: This specifies details about the director's appointment, including the position held on the board.

• Roles and Responsibilities: Enumerates the director's duties, responsibilities, and expectations, covering aspects such as participation in board meetings.

• Term of Service: This specifies the duration of the director's term, whether for a specific number of years or until the occurrence of a particular event.

• Compensation and Benefits: Provides details about the director's compensation, encompassing salary, bonuses, stock options, sitting fees, or other benefits.

• Confidentiality and Non-Disclosure: Includes a clause stipulating the director's obligation to maintain confidentiality regarding the appointing company's proprietary information and prohibiting the disclosure of sensitive information to third parties.

• Conflict of Interest: Conflict of interest is when a director holds multiple interests that may affect their ability to perform their duties as director and may prevent them from acting in the best interest of the appointing company. This document includes the requirement for the disclosure and management of potential conflicts of interest.

• Termination and Removal: This specifies conditions under which the directorship can be terminated, such as resignation, removal by the board, or other specified circumstances.

Please note that this document is different from the company's Articles and Bylaws as these documents are the internal rules that regulate the day-to-day operations of the appointing company. On the other hand, a Director's Service Contract regulates the terms and conditions of the director's service to the appointing company.

How to use this document

After completing the form, the document should be printed and signed by the newly appointed director and the appointing company.

To sign this document, the common seal of the appointing company should be stamped on the document and the document should be signed by the managing director/CEO of the appointing company. The document should then be sent to the newly appointed director for their signature. If the newly appointed director is a company, the document should be signed by the director representing the company (the company's authorized representative).

After signing, the appointing company and newly appointed director should each keep a copy of the document for their record.

Applicable law

The Companies and Allied Matters Act, 2020 applies to this document. The rules of general contract also apply to this document.

How to modify the template

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