Six Reasons To Consider Establishing An Advisory Board By: Susan Hammond
Many businesses needing outside expertise but unable to afford the cost of numerous consultants have turned to an advisory board. An advisory board is non-legal board of directors where the advisors are selected by the CEO. The CEO generally selects advisors due to their skills, talents, expertise and contacts.
Why Consider an Advisory Board?
Here are six benefits your business will receive by establishing an advisory board:
- Providing additional business experience, skills and functional expertise that maybe missing within your company.
- Strategic thinking about how to position the business.
- Providing access to new contacts and resources.
- Increasing credibility to the outside. This is particularly useful to a start-up.
- Creating greater accountability of senior management.
- Providing an outside perspective about what is working and not working inside the company.
Top Two Factor for Success
Establishing an advisory board will work best where the CEO is:
- Open about sharing company information;
- Open to constructive criticism.
Any limiting of access to financial and other key information handicaps the advisors and dilutes the benefit to the business. If you don’t see yourself “opening up the kimono” as I like to say about divulging company information or are not partial to receiving constructive criticism consider finding a mentor, or joining either a CEO Forum or Mastermind Group.
The Formation Process
Forming an advisory board is a multi-step process necessary to ensure you:
- Pick the right advisors;
- Protect yourself and the company;
- Maintain a good relationship with anyone not selected.
In my next post I will discuss the four questions to consider before embarking on the process.