Need an expert point of view? Sound out your advisory board
Expand your team and your knowledge base by building an advisory board that will help both you and your business. The members of this informal group, chosen by you, can provide guidance on how to run your business as well as serve as mentors.
Do you have all the resources and experience required to make every decision? Expert advice can be useful when you need more than your instincts to guide you. If you are unable to make an objective choice, an advisory board can help with some tough decisions. This sort of good governance can also be handy when it comes to attracting investors.
Your advisory board can:
- Act as a sounding board
- Help develop new ideas and strategies
- Provide mentoring to you and your management team
- Offer business contacts and competitive intelligence
The size of your advisory board should reflect the size of your business. Staggering the advisors' terms will constantly refresh the board.
How to build the board:
- Use personal networks, industry contacts, specialized consultants, and referrals to find advisors that are a good fit.
- Seek representatives from the legal and financial fields, as well as business owners from your area of expertise. Look for advisors who will challenge your views. Aim for varied experience and skills.
- Prepare an irresistible pitch. You may also wish to offer some sort of incentive.
- Keep your expectations within reason. Regular interaction is the key to a profitable relationship, but your advisors' time is precious. Be clear about the board's mandate.
- Determine how often the board will meet and let your advisors know what their roles are. Make sure they have the time to participate.
The combination of experience and fresh perspective can result in valuable feedback. This, in turn, can lead to improved productivity, lower risk and a stronger bottom line. Keep in mind that an advisory board does not have the legal responsibilities of a board of directors. However, having one is good preparation for the more formal structure of a board of directors later on.
From time to time, evaluate your advisory board's performance to make sure it is really helping to make your business more successful. For more information on advisory boards and dealing with those at the helm of your team, see our sections on Governance and partnerships and Management leadership.