Advisory boards offer valuable support to growth companies through expertise, strategic guidance, industry connections, and mentorship. They enhance the company’s credibility, provide market insights, and help with risk mitigation, access to capital, international expansion, and diverse perspectives. Advisory boards are instrumental in problem-solving, governance, talent acquisition, product development, and exit strategies, making them a key resource for company growth and success.
What is an Advisory Board?
An advisory board is a group of experts that provides informed guidance to an organization’s management. Although their advice is non-binding, it is based on their extensive industry experience. This board comprises accomplished professionals who can help a company avoid common pitfalls and accelerate its path to success. Furthermore, an advisory board can be a valuable ally in achieving effective corporate governance. Unlike a fiduciary board, advisory board members are chosen by the CEO or executives running their company, and the CEO has the sole discretion to use their advice as they see fit.
Why Build an Advisory Board?
As an executive building a company, it can be challenging to have a large team with specialized legal, HR, or regulatory expertise to provide guidance. Moreover, the complexity and pace of the business world can make it challenging to get help on any topic. This is where advisory boards come in handy. They can fill in skills gaps and offer on-demand expertise for reliable advice. Advisors can also facilitate introductions to people who can help you and your company. A personal introduction to a high-caliber connection can make the difference between success and failure.
Speed to Implementation
Building an effective board of directors is a process that requires a long-term commitment. Board members must have good chemistry. A quicker way to identify suitable individuals for the board of directors is to assemble an advisory board. An advisory board allows you to observe potential members’ contributions and level of commitment before appointing them to the board of directors. It can serve as a feeder group to the board. Unlike the board of directors, an advisory board generally meets twice yearly to discuss a narrower range of strategic issues. On the other hand, board directors meet four or more times a year, and board committees require additional time commitment and more frequent demands placed on the organization that are essential to address.
Safe Harbour
A CEO may feel more comfortable expressing partially defined options or tentative views before a group of people whose expressed purpose is to give advice. Presenting to an advisory board can serve as a “test drive” before being more definitive in public or before the board of directors. Advisors can contribute to your personal development. Over time, and as your company grows, these advisors can become your mentors and even serve on a future company you may launch.
Getting Started
While determining the mandate of an advisory board, recruiting members, and organizing the group for success may seem daunting, Executive Leaders for Advisory Boards (ELAB) is here to help. ELAB is an exceptional group of select company founders, owners, corporate officers, entrepreneurs, and global executive leaders—all highly accomplished, successful, and organized to serve small, mid-, and enterprise-level companies at all stages of growth.
ELAB can assist your organization in developing its strategic roadmap, identifying, and eliminating obstacles to growth, and providing the ongoing guidance required to scale efficiently. Our advisors have extensive experience and expertise and a vast network of successful professional contacts, which we leverage for your benefit. Our approach is tailored to your unique needs and goals, ensuring that we are aligned with your organization and working towards your success.
Final Thoughts
The purpose of creating an advisory board has come full circle. It is fundamental for every company to have one as it plays a vital role in the company’s growth and provides added confidence when tackling various business hurdles. In the end, the value you receive from it is well worth the investment.