Advisory boards are playing an increasingly prominent role in businesses of all sizes. From the large multinational looking to better understand local markets to the start-up venture keen to sell its product into a specific customer, the appointment of an advisory board can be key to a company achieving its objectives.
Without holding any legal responsibility or authority over the governance of an organisation, an advisory board is a body that – quite simply – advises the management of a business. It does not replace the Board of Directors but, instead, it complements it – filling specific knowledge gaps and providing specialist expertise.
The purpose of an advisory board, therefore, is to be a source of expert advice on a particular area. This could be keeping abreast of the latest scientific or technological developments or offering insight into how best to penetrate global markets. Regardless of the kind of expertise a business is trying to secure, it is important that a clear remit is set in order for an advisory board to be effective.
So, how is such a body appointed?
The first step is to identify and agree upon what skills exist (or should exist) within the main board. In doing so, it creates a clearer picture of the nature of the contribution required of the advisors.
Once the objectives of the advisory board have been set, it is important to determine the time commitment that will be expected. Having this defined from the outset will make it easier to target potential advisors in possession of both the experience and the availability that is sought. Some consideration should also be given to the types of personalities that would work well with the existing Directors and represent the best fit for the business overall.
Identifying and securing advisors might be as simple as looking to one’s own network. However, seeking the services of a consultancy in this area will offer access to a broader pool of individuals – which is important given the likelihood that more than one person will need to be considered for each role. A consultant will also undertake the legwork of actually approaching and interviewing candidates as well as helping to craft a suitably compelling proposition and compensation package – crucial factors when trying to attract an advisor.
A client came to Intramezzo looking to augment its investor-heavy board. The company’s growth strategy was hinged upon international expansion and, therefore, the business sought an advisory board member, well-connected in Central and Eastern Europe, with a background in retail technology solutions.
Through a combined approach of search and networked referrals, a candidate with exactly this experience was found and appointed. This individual, who had previously been acting as an advisor on retail strategy to the Government, has made an immediate impact – introducing £multi-million projects into the pipeline within six months of starting.
Making the right appointments is paramount. Good advisors will not only help build the business but also act as mentors to the management team. They should challenge the thinking of the board and, free from corporate responsibility, offer a much narrower focus on key issues.
With sufficient planning and clear objectives, an advisory board can be a powerful asset to any company. It provides a business with access to otherwise inaccessible talent, allowing that business to tap into a collective experience that broadens its thinking, networks and opportunities.