Many businesses appoint an advisory board to help with strategic decisions. If you’ve set one up, the next step is managing it properly. Here’s how.
What is an advisory board?
An advisory board is a group of people you bring together to give your business advice and support.
Unlike a formal board of directors, advisory boards are more flexible and informal. They provide guidance and expertise to help you reach your goals. If you haven’t set one up yet, our ‘What is an Advisory Board?’ blog explains the benefits.
Who’s accountable?
If you’ve chosen well, your advisors will be experienced people who genuinely care about pushing your business forward. They’ll hold each other accountable for getting things done – including you.
But remember: being on an advisory board doesn’t make someone a company director. And an advisory board isn’t a replacement for your board of directors.
As a director, you need to manage how much influence advisors have. Without clear boundaries, they could accidentally become ‘shadow directors’ – people who effectively act as directors without the formal role.
Bottom line: you’re accountable for running the advisory board in your company’s best interests.
How should it work?
The good news is you have flexibility. There are no fixed rules about how often to meet or what your objectives should be.
Your board could meet regularly or occasionally. Members don’t even need to meet all together if that doesn’t work for you. It depends on what you’re trying to achieve.
Start with a terms of service agreement. This sets out how the company and board will work together. Consider questions like:
- What’s the board’s purpose?
- How much time will it take?
- When and where will meetings happen?
- How will everyone communicate?
- How will advisors be paid?
Keeping everyone on the same page
Be clear from the start about what you expect from board members.
Remember the difference: mentors work informally without payment, whilst advisors have formal agreements and get paid for their time – usually with equity.
You recruited these people for specific reasons, so communicate regularly and clearly. Someone needs to handle the admin: preparing meeting papers and making sure they reach everyone securely and on time. Tools like the Governance360 platform can make this straightforward.
Should you review things?
Yes, especially for younger companies. Your business needs can change quickly, so review both your objectives and your board members regularly.
When things change frequently, tracking progress can get messy. This is where a tool like the Governance360 Action Register feature helps – it keeps all your actions, outcomes and next steps in one place.
The takeaway
Managing your advisory board well achieves two things: better results for your company and proof you’re meeting your director responsibilities.
It’s worth the time and thought.
Find out more: Check out our director training course to understand different types of directors and board roles.