0207 183 4833 or 07828 490 390

Company directors’ legal responsibilities are documented at Companies House in seven key areas. Companies House report about the directors’ competencies in promoting the success of the company within the company constitution.  In addition, directors need to exercise independent judgement, and operate their duties with reasonable care and skill. Directors must also manage conflicts of interest and personal benefits and keep records of company administration.

Competence of directors

First, we must entertain the general duties of a director. The director has been appointed by the shareholders and should always act within the powers of the company constitution and the company articles of association. In addition to their honesty and integrity, the director must exercise their responsibilities and accountabilities within their competencies. These general duties must underpin the competencies of a director’s expertise. For example, we consider recruitment directors.

The legal responsibilities of a recruitment company directors are similar in generic terms to that of company director. The directors head of the entire recruitment department. They have a vital role in company growth, leading the progressive implementation of strategic talent acquisition. In addition, directors commission the evaluation of the whole recruiting function and strategy to progressive company betterment year on year.

Recruitment directors also lead or manage the selection process of candidates. They interview candidates according to their capabilities that match the roles advertised. The directors also oversee the implementation of procedures, the day-to-day performance management of employees and agents.  and comply with employment law.

Personal Integrity

The director’s integrity is very important, not only under the common law but also to the shareholders.

Directors cannot use the company powers for personal gain. Therefore, they should not use company finances to resource their personal circumstances unless this is documented through the company records as directors loan agreements.

The directors must not keep company profits secret or disclose company secrets or intellectual property especially in a manner that will be a detriment to the company well-being or longevity. They have been appointed with an assumption that they undertake fiduciary duties to the company and its shareholders. The shareholders rely on the company directors’ legal responsibilities for the success of the company.

Justifiably, the shareholders and company must trust the directors and their ability to exercise independent judgement in their business activities.

Disclosure Responsibilities

Directors should also inform the company if they have any interest in company existing contracts or future ventures. They should promptly report personal relationships with persons external to the company. Directors must promptly disclose to the company their business interests in addition to their personal identification details. The details include reporting name, address nationality and occupation to the government company registration departments. This department is Companies House in the UK.  They should keep the company up to date with any changes to this information.  This is the legal responsibility of recruitment company directors: to act in the best interest of the well-being and profitability of the company and to comply with legislation requirements. They should exercise their recruitment duties with reasonable care and skill. For example, if appointments require enhanced vetting procedures for candidates, then these procedures should be well-documented within the company policies.

Financial Accountabilities

The company directors also need to maintain true and accurate records of company financial accounts and affairs. They produce the financial statements to the company shareholders. Directors are responsible for reporting the financial accounts on behalf of the shareholders to the government regulators such as HMRC, Companies House and their regulatory bodies when appropriate.  The recruitment directors should be able to be able to identify company liabilities in their financial statements through auditing and reporting systems. Staff with appropriate qualifications and skills will also need to be registered with their professional associations to maintain high standards in the company. Overall, the financial accountabilities are the company directors’ legal responsibilities.

Accountability to Shareholders.

The directors are also required to write an annual report to shareholders each year. This is called an annual report. The annual report updates or informs the shareholders about the company activities, financial position, future risks, the workforce, and to update details of shareholder members. The company director’s legal responsibilities are to call the annual general meeting, circulate agenda and other documents including financial statements.

The directors should record and circulate the minutes of any board meetings and the Annual General Meeting (AGM) and this should include updates within the company. These minutes need to be kept in a central location that can be accessed by those with relevant permissions including company regulators and auditors.

External Accountabilities

The powers of directors are determined by the company constitution; however, we cannot escape the company’s position and reputation in the community. Part of the recruitment company directors’ legal responsibilities is accountability to external administrators and regulators. The directors must ensure that the company registration documents, payments and reports are sent to the appropriate body and at the right time. The company must uphold the law and the directors must ensure this to avoid penalties, consequences, and personal and/or financial detriment to the career of the director.

Director Training

Are you recruiting for a director? As a director, are you considering implementing training for your team and employees? Online training and certification are available here. Or just contact us for further support if you are a new director or a director that is looking for consulting or online professional development to fulfil your recruitment company directors’ legal responsibilities.

Contact us

Join our Newsletter

Continual Professional Development Courses

Translate »