Part One - What are your responsibilities as a Company Director?
You will have several responsibilities from the day that you are appointed a Director to your company. Your main responsibilities are to perform a number of duties under the Companies Act 2006 and these will still apply if you are either not active in the role as a director, you have not yet been formally appointed as a director or you control a board of directors without actually being on it.
You have a responsibility under the company’s constitution and the articles of association. These are rules about running the company agreed by the shareholders, other directors and company secretary if you have one. These will detail exactly what powers you will be given as the director in other words they will tell you what you can and can’t do as the company director.
You must act in the best interest of the company and to further its success. You need to consider the interests of the shareholders and employees as well as external parties like suppliers, customers and the effect that the company as on the environment and wider community. If the company becomes insolvent you will need to consider the best interests if the creditors instead of the company.
You need to act independently and not allow other people to control your powers or to influence your decisions. You can take advice but ultimately the choice is to be that of the director.
You must discharge your role as a director with reasonable care, skill and diligence. The more qualified you are the greater the skill will be expected of you.
You must avoid any conflicts of interest. You should consider the positions of your family to avoid conflicts of interest and disclose them to the other directors should a conflict arise. Guidance can be sort from the articles of association should a conflict arise on how best to deal with it. This duty would also apply if you are no longer a director in that you will not seek to exploit an advantage that you became aware of as a result of being a director.
You must not accept benefits from a third party that you are offered because you are a director if this would later give rise to a conflict of interest. You can accept hospitality if there is no clear conflict of interest involved.
You must disclose if you have an interest in any of the transactions that the company is involved with, for example if the company was to enter into a contract with a family member or to buy property owned by yourself.