| DO YOU AS A DIRECTOR OF A REGISTERED CLUB KEEP YOUR BOARD PAPERS? |
In the initial instance an ex Director may well feel that during their time on the Board they discharged their duties properly, read the Board papers, attended meetings and kept an eye on what management was up to. A Director might also feel comfortable that the Articles of the Club gave the Director an indemnity and that the Directors’ and Officers’ Insurance Policy was further protection. Unfortunately this may not be the case. It may be that an ex Director had discharged their duties properly, but if the Director has not kept copies of all the Board papers and if the Company becomes difficult about providing access to the papers or they are lost or destroyed, then how can a Director prove their innocence? What if the company claims legal privilege on letters providing legal advice to the company? Company Directors should plan on keeping all Board papers and other documents received from the Company for at least seven (7) years after leaving the Board. Directors should also give consideration to entering into a Deed with the Company whereby the Company will indemnify the Director against any liability incurred as a Director and will pay any reasonable defence costs in relation to a claim arising from the Director’s position on the Board. A further protection to a Director could be received by entering into a Deed with the Company to the effect that: (a) The Company is required to keep a complete set of all Board papers. (b) The Director is entitled to have access to the Board papers (while the Director has been on the Board) and receive a copy of them at no cost even after they are no longer on the Board. (c) The Board papers should include any information in relation to which legal privilege is attached. Directors should also consider entering into an Agreement with the Company that the Directors’ and Officers’ Insurance Policy should be kept valid for at least seven (7) years after the Director ceases to be on the Board. If the Club of which you are a Director does not provide for all of this then you should perhaps ask why not. Simon Della Marta |
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