Do you ever ask yourself how to get your company back on track once its growth has plateaued so you can accomplish your goals? If so, then it might be time to form an advisory board.
Before doing that, however, you need to determine is your company is really ‘off track’ and not simply struggling with a management team that has maximized its expertise and needs some direction to take your company to the next level. If, after reviewing your business and you management team, you are still asking these questions, then it might be time for an advisory board.
What is an Advisory Board?
An advisory board is a group of advisors selected by the company, who lend insight and counsel to the owner, chief executive officer, or management team. Most advisory boards consist of three to five members. Their role is to provide counsel, advice, contacts and complementary competencies that go beyond that of the management team.
Advisory boards provide independent and objective advice and mentorship, and allow the organization to tap into the knowledge and experience of others that the company’s management team might not have.
Advisory boards have no statutory fiduciary duties and serve at the will of the company. It is important to recognize that an advisory board does not replace the company’s statutory board. The true benefit of an advisory board is that it helps companies focus on business strategies and the issues that matter most as they grow and prosper.
Why Create an Advisory Board?
Emerging companies benefit from advice and counsel of skilled advisors to supplement management’s knowledge and experience. Advisory boards lend insight and perspective to business strategies while leaving the implementation to management and employees of the company. Further, an advisory board can:
- Help determine benefits and risks;
- Generate contacts and potential resources;
- Mentor management;
- Provide industry expertise;
- Assist with succession planning; and
- Help hold management accountable to deadlines and tasks.
A good advisory board can be a powerful tool to aid the growth of your company. In order to make the most effective and efficient use of your advisory board you must be willing and able to:
- Confide in others about yourself and your business;
- Present key strategic issues for consideration of others;
- Be able to accept criticism; and
- Take the necessary time to prepare for meetings and communicate.
An advisory board will only be effective if the company and management is willing to expose their skeletons and share their ideas. While a company’s statutory board provides direction and oversight to the company, an advisory board provides discretionary advice for the company as it develops strategies and helps the company reach their future goals and aspirations.