Role and Remit of Directors of Trading Arms
Gildencraft CIC, or any other trading company of The Guild is a trading arm of The Guild only and is subordinate to The Guild and will work within the constitutional and ethical rules and manifesto of the Guild.
Duties of a Guild Company
The company itself has numerous legal duties. These include duties under the Companies Act itself, such as to maintain full and accurate accounting records and to make relevant filings at Companies House (included the annual accounts). It also has to comply with all other laws and regulations applicable to it (such as tax and employment laws pertaining to work contracts, employees, work vehicles and premises). As the company acts through the board of directors, the directors are responsible for ensuring compliance by the company, (regulation 29)
In certain cases, directors are made specifically liable for breach (regulation 68), for instance, in the case of accounting records, every officer of the company is liable to a fine, imprisonment or both.
Directors and their Duties
As soon as possible, Guild Craft members should comprise a two thirds majority or more of the board of directors of any Guild trading arm. These Guild Craft members should be put forward for directorship by the Executive Craft Committee of The Guild.
Gildencraft will serve only the purposes of:
•facilitating and supporting the Master in his teaching and
•providing the means to pay Apprentices
It is the responsibility of the directors to;
• make sure money earned by Guild members goes to the correct department in a timely fashion.
The agreed percentages of hourly work rates (not including extras i.e materials, travel or digs) are as follows:
Gildencraft costs 10%
Clerk's Office 8%
Masters Office 16%
Frith Fund 24%
All money is earned by and belongs to Guild members and as such any deviation from the divisions set above must be approved by the Guild Executive Craft Committee. Directors not working within this directive would be liable to prosecution.
•ensure relevant insurances are in place.
•ensure all Gildencraft vehicles are legal and roadworthy.
Gildencraft must never exploit Guild members for the sake of itself by expectations of voluntary work etc.
Gildencraft directors have no involvement, other than an overview in;
• The day-to-day business of the Apprentices.
•Technical or Craft aspects of the business.
Nor do they have any involvement whatsoever in Guild matters unless they are also a Guild member of the appropriate level.
The board of directors are in charge of the management of the company's business; they are responsible for ensuring that the company meets its statutory obligations.
A company must have a minimum of two directors if public, and a minimum of one if private (Companies Act 2006, section 154). At least one director must be a natural person (Companies Act 2006, section 155). The method of appointment of directors will generally be governed by the Articles.
The first directors are chosen by the subscribers to the company's Memorandum and thereafter by procedures as provided by the Articles, e.g. by the Guild members in general meeting or by written resolution.
At a general meeting of a public company, the appointment of each director must be voted on individually, unless a resolution that a single nomination will suffice has first been agreed by the meeting without opposition (Companies Act 2006, section 160(1)). As the new director will be acting for craft members and have access to their finances a new appointee must be approved by Executive Craft Committee of The Guild.
A director of a company owes seven general statutory duties to the company (Companies Act 2006, sections 171 to 177). These seven duties are set out below:
to act within powers given in the constitution;
to promote the success of the company for the benefit of its members as a whole;
to exercise independent judgment;
to exercise reasonable care, skill and diligence;
to avoid conflicts of interest;
not to accept benefits from third parties;
to declare interest in proposed transaction or arrangement.
The Government has issued further high-level guidance as to how directors should act to ensure compliance with their duties:
In the company's best interests, taking everything you think relevant into account.
In abeyance the company's constitution and decisions taken under it.
With honesty, and mindfulness of the fact that the company's property belongs to it and not to you or to its shareholders.
With diligence, care and sound knowledge of the company's affairs; making good use of any special skills or experience.
Ensuring that the company keeps records of your decisions.
Remembering that you remain responsible for the work you give to others.
Avoiding situations where your interests conflict with those of the company. When in doubt disclosing potential conflicts quickly.
Seeking external advice and qualified help where necessary, particularly in the company’s financial matters.
The conduct of board meetings is almost entirely unregulated by the Companies Act (unlike general meetings, which have a whole chapter of the 2006 Act, Part 13, chapter 3, consisting of 30 sections).
The only statutory provision affecting board meetings is CA 2006, sec. 248, which requires minutes of board meetings to be kept. See also sec. 249 on such minutes as evidence.
The rules for conducting board meetings depend on the company's articles.
An Executive Craft Committee member must be present at all Gildencraft board meetings with observer’s status; advice and comment given at the request of the directors. The Executive Craft Committee member must report back to the Craft membership at the earliest opportunity. The Executive Craft Committee can overturn decisions made by the directors in all but those of legal requirement.
Decision-Making by Directors
Directors must take decisions collectively whenever possible.
(1) The general rule about decision-making by directors is that any decision of the directors must be a majority decision at a meeting.
(1) A decision of the directors is taken in accordance with this article when all eligible directors indicate to each other by any means that they share a common view on a matter.
(2) Such a decision may take the form of a resolution in writing, copies of which have been signed by each eligible director or to which each eligible director has otherwise indicated agreement in writing.
(3) References in this article to eligible directors are to directors who would have been entitled to vote on the matter had it been proposed as a resolution at a directors' meeting.
(4) A decision may not be taken in accordance with this article if the eligible directors would not have formed a quorum at such a meeting.
Calling a directors' meeting
(1) Any director may call a directors' meeting by giving notice of the meeting to the directors or by authorising the company secretary (if any) to give such notice.
(2) Notice of any directors' meeting must indicate-
(a) its proposed date and time;
(b) where it is to take place; and
(c) if it is anticipated that directors participating in the meeting will not be in the same place, how it is proposed that they should communicate with each other during the meeting.
(3) Notice of a directors' meeting must be given to each director, but need not be in writing.
(4) Notice of a directors' meeting need not be given to directors who waive their entitlement to notice of that meeting, by giving notice to that effect to the company not more than 7 days after the date on which the meeting is held. Where such notice is given after the meeting has been held, that does not affect the validity of the meeting, or of any business conducted at it.
Participation in directors' meetings
(1) Subject to the articles, directors participate in a directors' meeting, or part of a directors' meeting, when-
(a) the meeting has been called and takes place in accordance with the articles, and
(b) they can each communicate to the others any information or opinions they have on any particular item of the business of the meeting.
(2) In determining whether directors are participating in a directors' meeting, it is irrelevant where any director is or how they communicate with each other.
(3) If all the directors participating in a meeting are not in the same place, they may decide that the meeting is to be treated as taking place wherever any of them is.
Quorum for directors' meetings
(1) At a directors' meeting, unless a quorum is participating, no proposal is to be voted on, except a proposal to call another meeting.
(2) The quorum for directors' meetings may be fixed from time to time by a decision of the directors, but it must never be less than two, and unless otherwise fixed it is two.
(3) If the total number of directors for the time being is less than the quorum required, the directors must not take any decision other than a decision-
(a) to propose further directors, or
(b) to call a general meeting so as to enable the shareholders to appoint further directors.
Chairing of directors' meetings
(1) The directors may appoint a director to chair their meetings.
(2) The person so appointed for the time being is known as the chairman.
(3) The directors may terminate the chairman's appointment at any time.
(4) If the chairman is not participating in a directors' meeting within ten minutes of the time at which it was to start, the participating directors must appoint one of themselves to chair it.
(1) If the numbers of votes for and against a proposal are equal, the chairman or other director chairing the meeting has a casting vote.
(2) But this does not apply if, in accordance with the articles, the chairman or other director is not to be counted as participating in the decision-making process for quorum or voting purposes.
Conflicts of interest
(1) If a proposed decision of the directors is concerned with an actual or proposed transaction or arrangement with the company in which a director is interested, that director is not to be counted as participating in the decision-making process for quorum or voting purposes.
(2) But if paragraph (3) applies, a director who is interested in an actual or proposed transaction or arrangement with the company is to be counted as participating in the decision-making process for quorum and voting purposes.
(3) This paragraph applies when-
(a) the company by ordinary resolution disapplies the provision of the articles which would otherwise prevent a director from being counted as participating in the decision-making process;
(b) the director's interest cannot reasonably be regarded as likely to give rise to a conflict of interest; or
(c) the director's conflict of interest arises from a permitted cause.
(4) For the purposes of this article, the following are permitted causes-
(a) a guarantee given, or to be given, by or to a director in respect of an obligation incurred by or on behalf of the company or any of its subsidiaries;
(b) subscription, or an agreement to subscribe, for shares or other securities of the company or any of its subsidiaries, or to underwrite, sub-underwrite, or guarantee subscription for any such shares or securities; and
(c) arrangements pursuant to which benefits are made available to employees and directors or former employees and directors of the company or any of its subsidiaries which do not provide special benefits for directors or former directors.
(5) for the purposes of this article, references to proposed decisions and decision-making processes include any directors' meeting or part of a directors' meeting.
(6) Subject to paragraph (7), if a question arises at a meeting of directors or of a committee of directors as to the right of a director to participate in the meeting (or part of the meeting) for voting or quorum purposes, the question may, before the conclusion of the meeting, be referred to the chairman whose ruling in relation to any director other than the chairman is to be final and conclusive.
(7) If any question as to the right to participate in the meeting (or part of the meeting) should arise in respect of the chairman, the question is to be decided by a decision of the directors at that meeting, for which purpose the chairman is not to be counted as participating in the meeting (or that part of the meeting) for voting or quorum purposes.
(8) A conflict of interest may occur when decisions are judged to be made due to relationship of board members, whether it be friendship or family connections, and be deemed by the craft members as injurious to the Guild or its smooth running.
Records of decisions to be kept
The directors must ensure that the company keeps a record, in writing, for at least 10 years from the date of the decision recorded, of every unanimous or majority decision taken by the directors.
Directors' discretion to make further rules
Subject to the articles, the directors may make any rule which they think fit about how they take decisions, and about how such rules are to be recorded or communicated to directors unless in contravention of The Guilds constitutional and ethical rules or against the wishes of a majority of craft members.
Table A - provisions on board meetings
Subject to the provisions of the articles and Guild constitutional and ethical rules, the directors may regulate their proceedings as they see fit. A director may, and the secretary at the request of a director shall, call a meeting of the directors. It is necessary to give notice of a meeting to a director who is absent from the United Kingdom. Questions arising at a meeting shall be decided by a majority of votes.
The quorum for the transaction of the business of the directors shall be fixed by the directors and unless so fixed shall be two. A person who holds office only as an alternate director shall, if his appointor is not present, be counted in the quorum.
The continuing directors or a sole continuing director may act, notwithstanding any vacancies in their number, but if the number of directors is less than the number fixed as the quorum, the continuing directors or director may act only for the purpose of filling vacancies or of calling a general meeting.
The directors may appoint one of their number to be the chairman of the board of directors and may at any time remove him from that office. Unless he is unwilling to do so, the director so appointed shall preside at every meeting of directors at which he is present. But if there is no director holding that office, or if the director holding it is unwilling to preside or is not present within five minutes after the time appointed for the meeting, the directors present may appoint one of their number to be chairman of the meeting.
All acts done by a meeting of directors, or of a committee of directors, or by a person acting as a director shall, if it be afterwards discovered that there was a defect in the appointment of any director or that any of them were disqualified from holding office, or had vacated office, or were not entitled to vote, be as invalid.
A resolution in writing signed by all the directors entitled to receive notice of a meeting of directors or of a committee of directors shall be as valid and effectual as if it had been passed at a meeting of directors or (as the case may be) a committee of directors duly convened and held and may consist of several documents in the like form each signed by one or more directors; but a resolution signed by an alternate director need not also be signed by his appointor and, if it is signed by a director who has appointed an alternate director, it need not be signed by the alternate director in that capacity.
Care must be taken to ensure that directors observe the common law (equitable) duties to act for the benefit of the company and to disclose any interest they may have in the matters being discussed, and that the statutory rules where a conflict arises are followed. The minutes should record that all such rules were observed.