External investors want to see the director`s service contract as part of due diligence. The agreement would serve as an example of how business is well organized and would show how steps have been taken to ensure that the company is prepared to make emergencies. As we have seen, it is likely that the directors of your company are employees of the company, just like the other members of your team. In addition, the Companies Act and other laws confer specific responsibilities on business leaders. For this reason, it is important that each manager has a service contract tailored to each task, especially if your company is listed. Even if a director is not an employee of the company, but is, for example, a non-executive director, they need a service contract from a director to cover his non-executive duties. However, since the management of the company has certain obligations and responsibilities, both in general and under specific legislation, it is important that these are covered by a specific agreement, called a director`s service agreement. In addition to the basics you expect in an employment contract, a director`s service contract is more detailed and comprehensive because of his professional role and incriminating obligations. In the absence of an agreement, it can be difficult to remove the director of the company as quickly and easily as the company would like. This can lead to the use of a lot of time and resources to resolve potential disputes. For many entrepreneurs, collusion between themselves and their own businesses may be an unknown concept. But directors often have multiple roles. They often depend on the operation of the business and often have access to confidential information such as finances, customer requests and staff questions.
They can also be shareholders. As part of good corporate governance, the service contract of your directors should clarify exactly what is expected of the director and, in particular, your expectations regarding decision-making and the need to act at all times in the best interests of the company. At MBM Commercial, our team of labour law experts advises on the most appropriate and important provisions to include in your GENERAL Manager`s service contract and provides a comprehensive contract that oversees your particular circumstances. We will work hard to understand the unique issues that affect you as a person and work with you to identify the security measures needed to be included in a service contract. Because your managers have privileged access to your confidential information, intellectual property, client lists and technical information, you also need to ensure that this information is protected.