Table of Contents

Non-executive director’s letter of appointment FAQs

Non-executive Director’s Letter of Appointment is a letter to appoint a non-executive director of a company who is not involved in the company’s day-to-day management.

A non-executive director is a board member but not part of the executive team.

Similar to a Director’s Service Agreement, a Non-executive Director’s (NED) Letter of Appointment sets out the duties of the director following their appointment to the post.

Contrary to a Director’s Service Agreement, the engagement under a Non-executive Director’s Letter of Appointment is not an employment relationship.

What is the difference between an executive and a non-executive director?

Essentially, an Executive director is appointed by a board of members for day-to-day business operations and management. 

Conversely, a non-executive director won’t look after daily business operations or executive tasks. A non-executive director is not a company employee. However, both roles have the same legal duties and responsibilities for the growth of an organisation.

The primary role of appointing a non-executive director is to provide creative feedback by observing the external business environment without prejudice.

What are the responsibilities of a non-executive director?

Non-executive directors are responsible for organisational policymaking activities, evaluating the performances of management teams and building professional relations and contacts with the external business environment.

They also act as an independent advisor who works entirely for the betterment of the organisation.

Non-executive directors also help executive directors by providing them with various business insights and ensuring that executive directors can meet their objectives.

How are Non-Executive Directors Appointed?

A company’s article of association governs the entire process of appointing a NED. In some companies, the board can appoint a Non-Executive Director. However, they need the shareholders’ approval at their next annual general meeting (AGM).

Following this, a letter confirming the initial term of the NED should be drafted.

Conclusion

In summary, drafting a simple contract outlining the terms of appointing a non-executive director quickly ensures good corporate governance.  

About Author

Daniel Walker

Daniel Walker

Daniel Walker is the Founder and Chief Executive Officer of Zegal, the trusted legaltech firm. Prior to founding Zegal, Daniel practised at DLA Piper, Stephenson Harwood and Clyde & Co, in Hong Kong, Singapore, and the UK.

Stay compliant with the Zegal template library

Zegal legal template are meticulously crafted with the precision of AI and the expertise of seasoned human lawyers, providing a unique blend of speed and reliability.

You can trust that Zegal agreements are legally sound and fully compliant with current regulations.

Whether you're a startupSME, or a larger enterprise, Zegal contract management will automate and speed up your legal processes.

Using Zegal will reduce risk, save money, and improve efficiency. Let us take care of the paperwork so you can focus on running your business.

Don’t compromise on speed or compliance. Stay secure, compliant, and efficient with Zegal.

“Love the new flow/design, very quick and easy to use now. I have done 2 or 3 customer contracts in a flash over the past 2 days.”

Get Started

Related Documents

If you're creating a Non-executive Director’s Letter of Appointment, you may also be interested in the following documents: