Do I need an Advisory Board…
…Or should I just use Google?!
One of the questions we get asked a lot is whether there’s value in setting up an Advisory Board alongside your main board? Regardless of whether you’re a growth business or an established one, there are many advantages to having a select group of trusted people around you to keep you on track. So let’s dive in and explore!
Firstly what is an Advisory Board?
In contrast to a main Board, the members of an Advisory Board are not normally officers of the company and generally have no fiduciary duty. They are generally a group of people with skills and connection that would be valuable to bring together in a structured way to support the growth and development of the business.
But I’m not doing lots of exciting things…
Advisory Boards are not just for exciting young hot shots, tech startups etc. If approached in the right way, they’re really positive for most businesses, especially those who are looking to go to the next level or looking at opportunities for growth, innovation or expansion. They help to expand networks, provide practical insight, are often a positive challenge and are way better that spending your time on Google or ChatGpt.
How will I know when I need one?
Regardless of size, type, market, structure or ownership, every business will benefit from an Advisory Board IF used in the right way. The purpose of this Board is to create support around you and to expand your access to be able to secure the continued running and growth of your business. If you can find us a CEO who doesn’t think they would benefit we’d love to meet them – and prove they’re wrong!
OK, so you’ve sold the idea. Now what?
Now, you need to know what is important to consider when selecting your Advisory Board:
You get more value outside of Advisory Board Meetings that in it – having the occasional meeting is fine, but build a relationship with the members so you can work with them and use their skills and connections on an ongoing basis.
Four or Five people is more than sufficient – if you’re wanting to build strong individual relationships then give yourself the time to do it.
Nobody gets rich from being on an Advisory Board – Advisory Board members generally get paid some or all of a mix of a small amount of cash (plus expenses) and a small amount of equity (often vested for a period of time). They get involved because you’ve got an interesting business, they like you, they’ll meet some interesting people by doing it and maybe they can earn a little extra cash too.
The right Advisory Board can add value to the business – but get their permission to be used in this way and if you don’t think they will add value to a deck, then you’ve probably got the wrong Advisory Board!!
Seek diversity – your Advisory Board should not be comprised of people who look and sound like you. If you want that get a cloning machine.
Be professional - although the relationships with Advisory Boards are often less formal, do have the agreement documented properly in a formal, written agreement that will set down the expectations on both sides including the term, the remuneration, the expected number of meetings each year and other relevant aspects.
With the increasing personal risks of being a Non-Exec Director, there shouldn’t be a shortage of potential Advisory Board members around, but, it’s harder to find the right people because the recruitment process is generally more informal and you don’t know who you don’t know.
We started Coleid with this in mind. Think of us as your quasi Advisory Board! We’re super-connectors who intentionally bring the right people together at the right time to bring benefits to all involved. We have helped a number of businesses establish and review their Advisory Boards – we would love to help you too!