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Legal Terms – Director
An officer of a corporation designated by or in accordance with the stipulations of the articles of association. Directors may possess an employment contract with the company (service directors and managing directors) or just participate in board meetings (nonexecutive directors). (Refer to DE FACTO DIRECTOR; SHADOW DIRECTOR.) A director must be a natural person and at least 16 years old, unless otherwise stipulated by the Secretary of State (Companies Act ss 156A-B, 157–158). Company members may inspect a director's employment contract (Companies Act 2006 s 239); contracts lasting two years or more necessitate approval via ordinary resolution (Companies Act 2006 s 188). Typically, broad management authority is conferred upon the directors acting collectively, although they may transfer some or all of these responsibilities to the managing director. Directors serve as agents of their company, to which they owe fiduciary obligations, requiring them to consider the interests of both company members and employees, as well as a duty of care, as stipulated in the Companies Act 2006 sections 170–77. Transactions that provide a conflict between fiduciary obligation and personal interests are governed by the Companies Act 2006, specifically sections 175, 177, and 182–214. Directors may be removed by ordinary resolution regardless of the provisions in the articles or any employment contract; nevertheless, such removal necessitates the payment of damages for breach of contract (Companies Act 2006 § 168). According to the Company Directors Disqualification Act 1986, directors may be disqualified for fraudulent trading or improper trading and actions rendering them ineligible for involvement in company management.
Directors' remuneration for their duties may be stipulated in an employment contract or established by the general meeting. Details are presented in the accounts and, if applicable, in the directors’ remuneration report for listed companies.
An officer of a corporation designated by or in accordance with the stipulations of the articles of association. Directors may possess an employment contract with the company (service directors and managing directors) or just participate in board meetings (nonexecutive directors). (Refer to DE FACTO DIRECTOR; SHADOW DIRECTOR.) A director must be a natural person and at least 16 years old, unless otherwise stipulated by the Secretary of State (Companies Act ss 156A-B, 157–158). Company members may inspect a director's employment contract (Companies Act 2006 s 239); contracts lasting two years or more necessitate approval via ordinary resolution (Companies Act 2006 s 188). Typically, broad management authority is conferred upon the directors acting collectively, although they may transfer some or all of these responsibilities to the managing director. Directors serve as agents of their company, to which they owe fiduciary obligations, requiring them to consider the interests of both company members and employees, as well as a duty of care, as stipulated in the Companies Act 2006 sections 170–77. Transactions that provide a conflict between fiduciary obligation and personal interests are governed by the Companies Act 2006, specifically sections 175, 177, and 182–214. Directors may be removed by ordinary resolution regardless of the provisions in the articles or any employment contract; nevertheless, such removal necessitates the payment of damages for breach of contract (Companies Act 2006 § 168). According to the Company Directors Disqualification Act 1986, directors may be disqualified for fraudulent trading or improper trading and actions rendering them ineligible for involvement in company management.
Directors' remuneration for their duties may be stipulated in an employment contract or established by the general meeting. Details are presented in the accounts and, if applicable, in the directors’ remuneration report for listed companies.
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