A boardroom can be greatly improved by the appointment of an advisory board. If you already have a formally appointed board of directors and they are overwhelmed with the workload, or perhaps simply too operational, utilising an advisory board could be just what you need to improve your company’s performance.
An advisory board offers a fresh kind of board support. While the role of a formal board of directors is to set strategy and manage resources, a role that carries substantial liabilities and responsibilities, the advisory board has no such remit. Effective board support during business transitions can make a world of difference in terms of business growth and maintaining a smooth strategy.
Roles and Responsibilities of the Advisory Board
The role of an advisory board is to offer suggestions, as opposed to directing, on specific issues assigned to the group. This could include:
- How can we increase our market share in a certain location?
- How can we motivate key staff?
- What is the market potential in X for our products or services?
- What are the next key strategic ideas for the business?
While the formal board can handle these issues, it’s likely that they do not have the time to commit to managing the complexity of these issues. The advisory board can offer board support to relieve the formal board of every aspect of responsibility.
Generally, the advisory board will meet less regularly than the formal board, perhaps quarterly. The number of advisory board members may be greater than the main board. However, it is recommended that the advisory board does not have more than ten members. While the advisory board is unlikely to expect payment, reimbursement of expenses is a reasonable request for the time and effort spent assisting the formal board.
Choosing Board Members
Choosing the right board members is integral to the success of the boardroom. You must identify individuals who can add value to your particular organisation. This means they must possess relevant experience and knowledge in your sector or complementary industries.
Potential board members should be thoroughly vetted to ensure that they can commit the required time and effort to helping the company reach its goals with a solid strategy. Critical thinking skills and the ability to push back and challenge through honest feedback are a must. The advisory board is appointed as a form of board support, so ensuring its members are in alignment with your company is of the utmost importance.
Potential Challenges of the Board
Assembling a group of experts who can use their skills to enhance your business performance can be highly beneficial. However, it also comes with its own set of challenges. For example, while enlisting a variety of people is extremely beneficial for maintaining diversity in perspectives and opinions, balancing these opinions can lead to potential conflict, so it is important to manage these differences constructively.
Another possible challenge is ensuring that all advisory board members consistently align with the company’s strategy. There must be an open channel of communication between the formal board and the advisory board, which offers board support.
Interested in Improving Your Boardroom?
A well-managed advisory board can elevate your company’s potential and growth to the next level. It requires careful consideration to choose the right board support members you can trust to prioritise your company’s best interests. However, the effort and benefits of board advisory for business growth can provide a significant return that will greatly benefit your company.
Interested in enlisting the services of an advisory board but don’t know where to start? Check out our downloadable guide here.