The rules for appointing a director are set both by law and by a company’s governing documents (the Articles). Make sure that you read the Articles before you start, to check the process and requirements.
A company’s shareholders can appoint directors. The Board of Directors can normally also appoint directors but check whether the Articles say that they can do this and whether the shareholders must then confirm the appointment at a general meeting.
Non-executive directors are appointed using a letter of appointment (LOA). This is a contract setting out the terms of the appointment.
Executive directors are appointed using a type of contract of employment appointment (a Service Agreement), which covers their employment status, office as director and the relationship between these.
In general, the Board can decide the terms of the appointment. However, the law or a company’s Articles will take priority over the LOA or Service Agreement if there is a contradiction.
Appointment of a director must be notified to Companies House - either Companies House in Cardiff for companies registered in England and Wales, or Companies House in Edinburgh for companies registered in Scotland.