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director


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N.

An officer of a company appointed by or under the provisions of the articles of association. Directors may have a contract of employment with the company (service directors and managing directors) or merely attend board meetings (nonexecutive directors). (See also shadow director.) Contracts of employment can be inspected by company members (Companies Act 2006 s 239); contracts of two years or more duration require approval by ordinary resolution (Companies Act 2006 s 188). Usually, general management powers are vested in the directors acting collectively, although they may delegate some or all of these powers to the managing director. Directors act as agents of their company, to which they owe fiduciary duties (in the performance of which they must consider the interests of both company members and employees) and a duty of care (Companies Act 2006 s 170–77). Transactions involving a conflict between their duty and their personal interests are regulated by the Companies Act 2006 (in particular s 175, s 177, and s 182–214). Directors can be dismissed by ordinary resolution despite the terms of the articles or any contract of employment, but dismissal in these circumstances is subject to the payment of damages for breach of contract (Companies Act 2006 s 168). Under the Company Directors Disqualification Act 1986, directors may be disqualified for fraudulent trading or wrongful trading and conduct that makes them unfit to be concerned in the management of companies.

Remuneration of directors for their services may be due under a contract of employment or determined by the general meeting. Particulars appear in the accounts and, if a listed company, in the directors' remuneration report.

Subjects: Law — Financial Institutions and Services.


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