Employment Contract Template for Directors (UK 2026)

Employment ContractDirector

Last updated: February 2025

When You Need This Contract

Director service agreements differ fundamentally from standard employment contracts because directors have fiduciary duties under the Companies Act 2006 that exist alongside their employment obligations. The agreement must address the dual nature of the director's position as both an employee and a company officer, board attendance and governance obligations, the interaction between employment termination and removal from office, and the enhanced restrictive covenants appropriate for someone with complete access to the company's strategic direction, finances, and client relationships.

Key Clauses

  • Companies Act 2006 fiduciary duties acknowledgement and compliance
  • Board attendance, governance obligations, and committee responsibilities
  • Enhanced restrictive covenants appropriate to director-level access
  • Termination provisions addressing both employment and office
  • Share ownership and shareholder agreement cross-references

What to Watch Out For

  • Not addressing the distinction between termination of employment and removal from office as a director, which are separate legal processes
  • Failing to include fiduciary duty acknowledgements and the director's obligation to declare conflicts of interest

Sample Clauses

  • Sample fiduciary clause: 'You acknowledge your statutory duties under the Companies Act 2006 including the duty to promote the success of the Company, to exercise independent judgement, and to avoid conflicts of interest. You shall promptly declare any situation in which you have a direct or indirect interest that conflicts with the interests of the Company.'
  • Sample dual termination clause: 'Termination of your employment does not automatically terminate your appointment as a director of the Company, and vice versa. You agree to resign as a director promptly upon termination of your employment if requested by the Board.'

FAQ

How does a director's employment contract differ from a standard employee contract?

A director's service agreement must address their dual role as employee and company officer. It includes fiduciary duty acknowledgements, board governance obligations, conflict of interest declarations, enhanced confidentiality covering board-level information, broader restrictive covenants, and provisions linking employment termination with resignation from office. Directors also have statutory duties under the Companies Act 2006 that exist independently of the contract.

Can a director's employment be terminated differently from other employees?

Directors can be removed from office by ordinary resolution of shareholders under section 168 of the Companies Act 2006, regardless of the employment contract terms. However, termination of the directorship does not automatically end the employment contract. The service agreement should address both scenarios and may include compensation provisions for removal from office during the contract term.

Related Templates

Employment Contract Template with Non-Compete Clause (UK 2026)

Employment Contract Template for Professional Services Businesses (UK 2026)

Generate this contract in 60 seconds

AccountsOS generates customised, UK-compliant employment contracts. From £10/month.

Get Started Free

This is guidance for UK businesses, not legal advice. Templates are illustrative. Consult a solicitor for complex matters.

View all templates