Directors and officers indemnities: Key components and practical tips

INTRODUCTION

Being appointed a director or officer of a company is an important step in an individual's commercial life. However, the appointment also carries with it a great deal of responsibility, and a certain level of risk. The duties owed by a director to a company are spelt out in the Corporations Act 2001 (Cth). A director or officer is entitled to expect that the company will safeguard him or her in the event that he or she is subject to litigation arising out of his or her conduct as a director. A common means of achieving this is through the use of an indemnity between the company and its directors and officers.

This article will examine:

• the key components of a directors' and officers' indemnity and access deed (Indemnity Deed) and some practical considerations for in-house counsel when drafting an Indemnity Deed;