Establishing an Advisory Board in Your Business

Setting Up Your Advisory Board

You don’t have to be a multi-million dollar publicly listed company to take advantage of the expertise and experience a Board can provide you and your business. We all have trusted confidantes who we discuss our business with, from time to time, but to have a more formal structure in place can be a very powerful management tool. An inexpensive, effective way to grow and support your business is by setting up an advisory board to support your vision.

Choosing The Right Board Members

The first important step is choosing the right board members. Your Advisory Board should be composed of people with a genuine interest in your business and desire to see it progress. The Board will serve as a sounding board, a source of ideas and expertise and give you honest advice.

1. Identify The Skills Needed

Identify what skills are needed and in particular seek out those skills that you don’t have. Generally speaking, most advisory boards have experts in the following fields:

Legal
Finance
Human Resources
Strategic Marketing.
People with the above skills also come with their own extensive networks, which can add to your business opportunities.

2. Choose The Right People and Determine Compensation

Choose people you admire and respect. You may have even been following their careers for some time and have seen the results they have achieved in their fields. You need to choose people you can trust, as they will be discussing sensitive issues and confidential information about your business. Most people will be flattered to be asked to sit on your board and if they can’t assist you they may be able to recommend other contacts within their field of expertise.

You will need to agree on a method of compensation to suit each member, which may not necessarily be financial – particularly during the start-up stage of your Board’s development.

Set Expectations

Next, be sure to set some expectations. What do you want your organisation’s Board to do and achieve?

Your legal Board member can advise on business models and deal with complex issues around shareholdings, ownership and compensation models. Your finance person helps you manage your growth without over-committing. Your HR member will help you deal with your staff issues such as recruitment and retaining key staff, contacts and remuneration. Your marketing member will help set the positioning of the business, identify growth opportunities and drive your targets for growth. However, everyone needs to be involved in setting the strategy and driving the centre’s vision.

You may decide to meet monthly or quarterly and when you do meet be well prepared. Distribute information well ahead of time so Board members have plenty of time to read through all the information and prepare their own thoughts and contribution.

As part of your business strategy, you may decide to have each member drive a particular project so have a plan and make sure everyone understands their role. Always maintain a professional edge with your advisers. Your advisers are not employees or suppliers and cannot be held accountable for your decisions. They are there to make suggestions and observations based on the information you provide, so ensure you maximize their expertise and time for your organisation’s success.

Steps to Setting Up an Advisory Board

Determine the skills required on your Board, which in turn will determine the size of your Advisory Board.
Recruit the right people for your organisation’s Board with proven skills and who are genuinely interested in engaging with your business.
Agree on the compensation for each Board member that suits you both.
Define and agree on everyone’s expectations.
Meet regularly, but remember it doesn’t always have to be face to face given the many technologies now available for small businesses.
Agree on your organisation’s strategic plan and work towards it!

An Advisory Board is a valuable management resource for small businesses. The old saying that no-one knows your business as well as you do still ring true but when your organisation is supported by an Advisory Board who are also dedicated to your success you will be unstoppable.

Hilary Knights is a former Board member of Brisbane North Institute of TAFE, the Sunshine Coast Grammar School and is a current Board member of SurgicalPerformance and is passionate about bringing strategic marketing expertise to the Boardroom!