An Advisory Board is a group of trusted mentors and advisors who provide you with guidance and feedback, based on their skills and interests. An Advisory Board has no governance or fiduciary responsibility, although many Advisory Boards transition to Boards of Directors over time, as a company matures.
Advisory Boards are in place simply to advise. Advisors add value by asking the tough questions at the right time, helping you to find the answers. In fact, their most valuable contribution may be to ask probing questions, rather than “provide advice”.
Should my business have an Advisory Board?
An Advisory Board can bring broad skills, experiences, and credibility to a business and its owners, depending on the Board's composition and mandate. If chosen carefully, an Advisory Board can provide access to specialist and generalist skills not held by the owners, decades of experience in the right industries, and a network of connections for building your business.
Simply having an Advisory Board signals your willingness to seek outside counsel, an important attribute when looking for new investors and business relationships. An Advisory Board can help provide you with the discipline to periodically re-assess business strategy and success.
Having to describe succinctly your business challenges to your Advisory Board will help you tackle them successfully.
When should I set up an Advisory Board?
An Advisory Board should be established at the earliest practical time. Although you may believe that you don't have time to set up and maintain an Advisory Board, you should quickly see better decisions and accelerated success by bringing more brains to bear on your challenges.
Expenses are generally limited to travel and meeting costs, because most Advisory Boards aren't paid, at least not initially. Time and money should not be constraints.
This is part 1 of a 2-part article