ACCA F4 - Corp and Business Law (ENG)

Part F Management, administration and regulation of companies  18: Company directors 273

When the appointment of directors is proposed at a general meeting of a public company a separate

resolution should be proposed for the election of each director. However the rule may be waived if a

resolution to that effect is first carried without any vote being given against it.

2.3 Publicity

In addition to giving notice of the first directors, every company must within 14 days give notice to the

Registrar of any change among its directors. This includes any changes to the register of directors'

residential addresses.

2.4 Age limit

The minimum age limit for a director is 16 and, unless the articles provide otherwise, there is no upper

limit.

3 Remuneration of directors

Directors are entitled to fees and expenses as directors as per the articles, and emoluments (and

compensation for loss of office) as per their service contracts (which can be inspected by members).

Some details are published in the directors' remuneration report along with the accounts.

Details of directors' remuneration is usually contained within their service contract. This is a contract

where the director agrees to personally perform services for the company.

3.1 Directors' expenses

Most articles state that directors are entitled to reimbursement of reasonable expenses incurred whilst

carrying out their duties or functions as directors.

In addition, most directors have written service contracts setting out their entitlement to emoluments and

expenses. Where service contracts guarantee employment for longer than two years then an ordinary

resolution must be passed by the members of the company that the contract is with.

3.2 Compensation for loss of office

Any director may receive non-contractual compensation for loss of office paid to them voluntarily. Any

such compensation is lawful only if approved by members of the company in general meeting after proper

disclosure has been made to all members, whether voting or not.

This only applies to uncovenanted payments; approval is not required where the company is contractually

bound to make the payment.

Compensation paid to directors for loss of office is distinguished from any payments made to directors

as employees. For example to settle claims arising from the premature termination of the service

agreements. These are contractual payments which do not require approval in general meeting.

3.3 Directors' remuneration report

Quoted companies are required to include a directors' remuneration report as part of their annual report,

part of which is subject to audit. The report must cover:

 The details of each individual directors' remuneration package

 The company's remuneration policy

 The role of the board and remuneration committee in deciding the remuneration of directors

It is the duty of the directors (including those who were a director in the preceding five years) to provide

any information about themselves that is necessary to produce this report.

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