Barnoldswick Office
Craven House, Newtown, Barnoldswick, BB18 5UQ
Director's Service Agreements
When you appoint a director, whether they are new to the business or stepping up from within, it’s important to establish a clear and reliable understanding of their role and responsibilities within your company. A formal director’s service agreement helps you do just that - providing a written record of the legal relationship between the company and the director, and setting out the terms under which they will work.
At Walker Foster, we support businesses across the UK in creating director’s service agreements that are fair, comprehensive and tailored to your needs. These agreements not only clarify expectations on both sides, but also help prevent disputes and protect your business interests - now and in the future.
Whether you're a growing company appointing your first director or an established business formalising arrangements for your board, we’re here to help. Our friendly and professional team will guide you through every step, ensuring your agreement supports good governance, clear communication, and a confident working relationship.
If you're ready to take a proactive step towards safeguarding your business and supporting your directors, contact us today. At Walker Foster, we’ll help you put the right agreement in place with confidence and care.
At Walker Foster, we understand the importance of a well-drafted formal service agreement - not just for the protection of your business, but also to provide clarity and reassurance to directors. Our expert legal team can assist with every aspect of the agreement, ensuring it is tailored, practical and comprehensive.
Our approach is always professional, approachable and aligned with your needs. We aim to provide long-term support that gives you and your directors confidence in your legal arrangements.
A director’s service agreement is a formal contract between a director and the company, setting out the terms of their working relationship in a clear and structured manner. It typically covers key areas such as duties, responsibilities, working hours, remuneration, benefits, holiday entitlement, notice periods, and termination provisions. This agreement acts as a mutual understanding between both parties, helping to align expectations from the outset and providing a reliable framework for how they will work together.
While similar in some respects to a basic employment contract, a director’s service agreement is distinct in that it addresses the additional legal and fiduciary responsibilities that come with holding a directorship. Directors have obligations, not only to uphold the terms of their employment relationship to the company but also as office holders under company law. This includes duties to act in the company’s best interests, to avoid conflicts of interest, and to exercise independent judgement. A director’s service agreement reflects this dual capacity by incorporating terms that safeguard the company’s policies and governance standards while also protecting the director’s rights.
At Walker Foster, we take care to ensure these agreements are clear, fair, and tailored to your specific situation. Whether you're looking to formalise the role of an executive director or appoint a new board member, we provide straightforward and professional
A director’s service agreement offers a practical and structured approach to defining the relationship between a company and its directors. While not every company may initially consider a formal agreement necessary, putting one in place can offer a number of benefits and safeguards for both parties.
Director’s service agreements provide a structured and reliable foundation for the relationship between a company and its directors. By setting out the terms of engagement in a clear and comprehensive manner, these agreements offer a range of benefits that help protect both parties and support good business practice.
While director’s service agreements are an effective way to formalise the relationship between a director and the company, there are a few considerations to keep in mind.
At Walker Foster, we focus on making this process straightforward and proportionate to your needs. We take the time to understand your business and draft director’s service agreements that offer clarity, protection and flexibility, all while supporting your long-term goals.
At Walker Foster, we offer a thoughtful, supportive and personalised service when drafting director’s service agreements. We understand that these agreements are not just about safeguarding the business - they’re also about providing directors with clarity, fairness and confidence in their role. Our step-by-step process is designed to ensure the agreement works for everyone involved, helping to build a strong and cooperative relationship from the outset.
We begin with a friendly and open conversation to get to know your business, the specific responsibilities of the director, and any unique considerations that should be reflected in the agreement. This helps us tailor the document to meet both your operational requirements and the director’s expectations, setting the right tone from day one.
Using the information you share, we prepare a bespoke agreement that sets out the terms clearly and comprehensively. This includes duties, hours, salary, benefits, holiday entitlement, notice periods, confidentiality provisions and - where appropriate - restrictive covenants. We carefully consider both the company’s interests and the rights of the director, enabling a balanced and fair approach that supports trust on both sides.
Once the draft is complete, we share it with you and offer the opportunity to go through it in detail. We explain each section, answer any questions, and make any necessary revisions to ensure the agreement feels right for everyone. This collaborative stage helps both the company and the director feel confident in the final version.
When all parties are satisfied, we prepare the final version for signing. At this point, the relationship is formalised on fair and transparent terms, offering legal clarity and reassurance. Directors gain a clear understanding of their role and protections, while the business benefits from structured governance and clear expectations.
A director’s role may evolve over time, and so might the needs of your business. We’re here to support you with any updates or amendments to the agreement as things progress. Whether it’s a change in duties, compensation or company direction, we create the agreement to reflect your current position accurately and effectively.
At Walker Foster, we don’t just draft documents - we build lasting relationships. Our advice is practical, approachable and rooted in your best interests. We’re here to make the process as smooth as possible, giving you and your directors peace of mind and a strong foundation for working together.
Non-executive directors typically do not have service contracts in the same way that executive directors do. Instead, their role is usually governed by a letter of appointment, which outlines the scope of their non-executive duties, the expected time commitment and any remuneration arrangements. These documents are not employment contracts or director's service agreements, but rather formal agreements that reflect their advisory and oversight responsibilities on the company's board.
Unlike senior employees or junior employees, non-executive directors are not involved in the day-to-day operations of the business. They provide strategic input and act as an independent voice within the company. However, it’s important to note that if a non-executive director begins taking on operational tasks or making executive decisions, they may be considered a de facto director or senior member of the management team in the eyes of the law - potentially exposing themselves and the business to additional obligations and risks.
At Walker Foster, we can advise on the appropriate documentation and structure for non-executive appointments, ensuring clarity, legal compliance and protection for all parties involved.
Similarly to formally appointed directors, shadow directors and de facto directors may also have service agreements in place - especially if they are actively involved in the management and strategic decision-making of the company. While there is no legal requirement for shadow directors to have a service agreement, it is often advisable to formalise their role in a written statement.
This is because shadow and de facto directors can still be held to the same legal standards and statutory duties as officially appointed company directors, including fiduciary responsibilities and compliance with company law. Having a service agreement helps to clarify the nature of their involvement and ensures there is a clear framework outlining their responsibilities and expectations.
At Walker Foster, we can help you prepare appropriate agreements for individuals in these roles, offering clarity and protection for both the company and the individual concerned.
If you need support with drafting a director’s service agreement or advice on any aspect of company contracts and breaches, our team at Walker Foster is here to help. With clear, professional guidance tailored to your business, we’re ready to assist you in protecting your interests and ensuring your legal arrangements are fit for purpose. Get in touch with us today to speak to one of our approachable legal experts.
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