Anonymous
Share this content

How would you take this opportunity

How would you take this opportunity

Didn't find your answer?

I'm thankful to be offered a position where two managing directors, each of their own company, would like me as their Finance Director- currently I'm not a director.

My time would be split between both companies, and so the salary.

Would anybody have any advice on a first directorship and contract negotiations?

 

Replies (9)

Please login or register to join the discussion.

avatar
By paul.benny
19th Apr 2021 16:52

Do your due diligence. Directors can have personal liability for matters such as health and safety. And it's collective responsibility.

Make sure that each is aware of the existence of the other and draft some ground rules for use of your time and how conflicting demands will be prioritised.

Are the companies in any way competing? If so, the potential conflict of interest is too great. In any case, think about confidentiality.

Thanks (1)
Hallerud at Easter
By DJKL
19th Apr 2021 23:14

Also, are they connected, if you have a disagreement in one will it spill into two.

Consider Employer pension contribution threshold if workplace pensions, you will need to earn two times lower limit to earn any employer contributions.

Also consider NI that will be paid, if distinct employments (not connected) you could have deducted more than otherwise re 12% and 2% bands (if total earnings>c50,000) but if they ought to be aggregated and are not you could end up paying too little NI.

Thanks (1)
Avatar
By I'msorryIhaven'taclue
20th Apr 2021 11:09

On a different tack, as a financial director you'll be first in line to carry the can in the event of the company having any financial issues (insolvency, failure to service debt, BBL loan issues etc etc). The other (non-financial) directors will simply claim they are non-specialists; whereas you are expected to exercise (and demonstrably so) a greater standard of care in all matter financial.

So do be careful you're not being set up as a patsy. Read the company's articles and any other resolutions / records. And, as the others have already indicated, watch out for conflicts of interest. That involves a little more than just checking to ensure you are, in both cases, permitted to work for the other firm as an employee / director; it comes all the way down to a director's fiduciary duty to act in the best interests of his company (and/or its shareholders) - which ideally means non-competing companies in different markets which are run/owned by different people.

Being a director can carry a lot of additional responsibility and duties; what's the up side for you? (And, if these are prestigious companies that might look good on your CV then fine; if not, are they batting cleverly by dangling the carrot that is a juicy title in the hope you'll bite and sign up for extra duties, greater responsibility, and regular overtime all at little or no cost to the companies?)

Thanks (1)
Replying to I'msorryIhaven'taclue:
avatar
By Truecon
20th Apr 2021 11:27

These are companies in a similar industry, the MD's are friends who each own their own companies and want an FD between them. The conflict of interest should not be an issue as each company is a niche market in the industry. However I will set ground rules for communications, confidentiality and conflict of interest should anything arise.

"Being a director can carry a lot of additional responsibility and duties; what's the up side for you?"

Both companies are high growth (this has been shown from their financials)

Thanks (0)
By normanwl
22nd Apr 2021 11:02

There is a guide to the responsibilities at https://www.steeleslaw.co.uk/publications/ look for the one on Directors Responsibilities.

Make sure you have Directors Liability insurance. As others have said due diligence!! Try your best to uncover any hidden nasties. You should add great value if they do not have finance as their background.

As part of your development look for the iod-competency-framework in google.

Thanks (1)
Hand
By Digit Dabbler
22nd Apr 2021 11:51

Finance director is a job title for a position in a company. It doesn’t automatically mean you become a company director with a position on the Board. Are you being offered both?

Thanks (0)
Replying to Digit Dabbler:
avatar
By Truecon
22nd Apr 2021 12:02

Yes I would be a company director with a board position also, for both entities.

Thanks (0)
avatar
By ScottB34300
22nd Apr 2021 12:44

Might also be worth you considering any future personal mortgages you wish to obtain would look at both employments (so far as you can look into the future, of course!). Many lenders, I believe, apply a discount to a 'second' employment and could impact affordability.

Also, you say both are high growth - will that not mean that you will need to decide which one requires you 'full time' at some point?

Thanks (1)
Replying to ScottB34300:
avatar
By Truecon
22nd Apr 2021 13:02

Thanks Scott, yes that would be the case that one would take all of my time within the next few years.

Thanks (0)
Share this content