Part 5 in a six part series – 'The ins and outs of advisory boards' – on establishing advisory boards for small and medium enterprises.
When seeking people to populate an advisory board, the skills, knowledge and experience of potential candidates should be matched to the needs of the company and the roles and responsibilities expected of the group. For example, if a company is expanding into a new market, at least one advisory board member should have knowledge of this market. Advisory board members should be selected as much for their personal qualities as for any technical competence they may offer.
Home in on the right people
Where can we source the best independent advice from someone that understands the business and the environment it operates in?
Will members of the extended family, such as a spouse or older children offer a new perspective, or do we need to look externally?
Is there anyone currently in the business, such as senior staff, who could join the advisory board?
What skill gaps require filling, such as strategy, human resources, marketing, legal, technology, operations and finance?
Do we need someone with valuable contacts, who could facilitate introductions to potential suppliers, customers, or new markets?
Can we find someone who will fit into our culture, with shared values, and a shared commitment to the development of both the business and management’s professional and personal skill set?
Do the individuals selected have the wisdom and courage to challenge the company’s thinking, but feel comfortable if the owner rejects their advice?
Advisory board members are often selected for their expertise in particular fields. Typical members of advisory boards might include:
Technology / Change expert
Customer / Retired competitor
Changing an advisory board
The ultimate aim of having an advisory board is value creation. If the advisory board is not creating value, then reconsider who sits on it or whether having one is the best means of achieving the original purpose. An advisory board adds value when there is an appropriate mix of people and there is open, frank and free-flowing discussion.
Coming up next – Part 6: Legal liabilities for advisory boards and companies