Letter of appointment for a non-executive director (NED)

by Practical Law Corporate

A standard document that can be used as a letter of appointment for a non-executive director (NED) of a listed company in the UK. This letter sets out the key terms of the appointment, confirming that the engagement is a contract for services and not a contract of employment. It outlines the appointee's expected time commitment, fees and expenses, and specific duties, ensuring compliance with relevant legal and regulatory obligations. It addresses the NED's responsibilities under frameworks such as the Companies Act 2006 and the UK Corporate Governance Code. Key provisions also cover induction, performance reviews, insurance and indemnity, managing outside interests and conflicts of interest, and confidentiality. The appointment term, termination provisions, and requirements for re-election are also detailed, providing a clear basis for the director's service. The letter expands on the sample non-executive director's appointment letter originally published by the Chartered Governance Institute UK & Ireland on 15 December 2011 and later updated. This letter should not be used to appoint an executive director, who should have a service agreement or contract of employment (see Standard document, Director's service agreement that contains Director clauses (private, listed and AIM companies).