By Brandon Fredericks, CPA | AGP Advisory, Leader
In my last article, I presented one of the benefits of an advisory boards as the ease of its creation. Though that is true, the upfront work should not be taken lightly. There is nothing worse than assembling the ‘wrong’ compensation of advisory board members.
Before fully greenlighting an advisory board, I encourage you to invest a full day workshop with your leadership team thinking about the following key components in assembling an advisory board:
Be clear about what you need and what you want to accomplish
An advisory board is created to serve you and your organization. Though we should heavily steer away from “Yes Man/Woman” candidates, the number one priority should be on a board that individually and collectively helps you move your organization forward and helps to grow. To do this, I recommend getting crystal clear on what it is exactly that your organization needs from an experience like this? What are you hoping to accomplish? The more vividly we can answer and contribute to these questions, the stronger our board will become.
Invest in a SWOT analysis of your current management team
This stage should be embraced and looked upon as a growth opportunity. No organization can have it all. What the advisory board allows you to do is close the gaps on expertise and skillsets that have alluded your organization in the past. Look for critical areas of expertise and knowledge that your company could use help with such as marketing, legal, finance, eCommerce, and research and development or information technology. Again, think about your organization 5-10 years from now—what skillsets do you need to have today to be ready for ‘tomorrow’?
Be clear on expectations
Nothing is worse than vague guidelines or objectives, whether in our day-to-day work or how we operate our organizations. By setting clear, written goals and objectives for your board of advisors, you have created a blueprint for what success looks like. Board members must know why they have been asked to serve and what is expected of them. Some questions or prompts I would encourage your teams to brainstorm during your workshop:
- What are the fundamental areas we need advice and guidance in?
- What specifically do we need the board members to do for us?
- What specifically do we not want the board members focused on?
- What is our process for finding and securing potential candidates?
- How do we avoid giving away too much control to outsiders?
- What will be the powers and limitations of the board?
- What will setting up the board cost initially? Annually? Will it be worth the cost?
- How will we measure the Boards success and effectiveness to our organization?
Determine the size and structure of your board
Advisory boards range in size from two members to over 30. The right size depends on many factors, such as your company’s size, complexity, stage of development and individual skills needed. Many of the clients we work with range from 5-10 members, which allows multiple voices to be heard, and exclusive enough that action can still be taken.
In a 2019 study by CAP, 74% of the private companies they survey are without an advisory board. What does this mean for you? A tremendous competitive advantage opportunity for your organization. Beginning today and developing a board of advisors can give your company a distinct advantage over your competition. This is particularly true for start-ups and family run businesses.
Our team lives the mantra everyday of Healthy Growth. The concept of an Advisory Board is near the pinnacle of action items organizations can take to grow their business to the next level. I wish you great success in your journey of assembling an all-star advisory board that will help write your organization’s next chapter. a