Board Structure

 

Company directors have a number of responsibilities and must carry these out diligently and transparently.

The board is made up of several locally based directors (ideally between three to five to allow for focused decision making while ensuring transparency), who are responsible for the day-to-day management of the company. Their powers are subject to the terms of the company’s articles of association and also the Companies Act 2006 and these powers are conferred on the directors collectively, when they are sitting as a board and passing resolutions for the management of the company.

Directors

Directors have a fiduciary responsibility to the Company and must act transparently and in good faith at all times. Directors should act in the interests of all local contractors and performers.

A director of a Company owes seven general statutory duties to the company under the Companies Act 2006:

  • To comply with the Company constitution and act within powers (as outlined in the Articles)
  • To promote the success of the Company for the benefit of its members as a whole
  • To exercise independent judgment
  • To exercise reasonable care, skill and diligence
  • To avoid conflicts of interest
  • Not to accept benefits from third parties
  • To declare interest in proposed transaction or arrangement.

As a director of a Company, you must ensure that the Company complies with its legal obligations:

  • Follow the Company’s rules, shown in its Memorandum and Articles of Association
  • File your annual accounts and your Company Tax Return (LOCSU can assist with this)
  • Pay any Corporation Tax owing
  • Maintain statutory registers and report changes
  • Comply with current law regarding the hiring and treatment of employees, where the Company has employees
  • Ensure that the Company complies with Health and Safety regulations
  • Ensure that the Company is adequately insured if delivering local services

These tasks can be delegated and as such you can hire other people to manage some of these  activities (for example, an accountant) but you are still legally responsible for your Company’s records, accounts and performance and ensuring compliance within the requirements.

Restrictions on who can be a Director

  • Individuals must be aged at least sixteen years and not have been disqualified from acting as a company director (unless the court has given them permission to act for a particular company)
  • They must not be an undischarged bankrupt (unless they have been given permission by the court to act for a particular company)

If a director has been subject to a GOC investigation this will need to be stipulated on the insurance form for directors that LOCSU arranges.

Director Agreement

This is an agreement for all directors to sign on their appointment. It sets out the key duties and responsibilities of a company director.  To access this PEC policy, you need to log-in to the members area, found at the bottom of this page.

Appointment of Directors

The appointment of a director must be in compliance with the Memorandum and Articles of Association. The LOC should approve all director appointments. The resolution (confirming the formal appointment of the director) must be provided to LOCSU within seven days in order that the Companies House registrar can be updated.

Resignation of Directors

The director should notify the PEC Board in writing that they wish to resign, which includes the date submitted and a resignation date. Please forward a copy of the resignation(s) letter to us so we can formally remove the director from Companies House.  This resignation needs to be submitted to us before 14 days of the resignation date.

Retirement of Directors

At each annual general meeting of the Company, it is good practice for one-third of the total number of directors to retire from office and be subject to re-election. Executive directors are exempt from this requirement. This is to be agreed locally.