Advisory Boards: Should Your Business Have an Advisory Board? [VIDEO]

At The Center Consulting Group, we have seen the advantage that privately held and family-owned businesses gain by having an advisory board. Companies with advisory boards gain enhanced business wisdom from leaders, experience increased accountability for their leadership teams, and expand their business networks.

In fact, in a study of small and medium businesses by a Canadian Bank, 86% of entrepreneurs who had an advisory board said it had a significant impact on their business.

What is an advisory board?

An advisory board is a group of about 3-5 external experts assembled by company owners to provide guidance, support, and strategic advice to the company's owners and senior leaders.

An advisory board differs from a fiduciary board of directors because they do not have any legal responsibility, and they can’t hire or fire the CEO. Rather, they serve as a sounding board and provide advice on leaders’ strategic issues.

What is the difference between consultants and an advisory board?

While both a consultant and an advisory board can help the company achieve its objectives, they serve different roles.

Consultants help business owners and leaders with specific challenges and opportunities for a defined duration, such as:

• Developing a strategic plan

• Preparing a succession plan and job descriptions

• Providing monthly coaching to a leader

• Developing a sales and marketing strategy

An advisory board meets approximately quarterly over multiple years to enhance focus on the business’s financial performance and give advice on top strategic and operational issues.

How do you implement an advisory board?

Here are some of the keys to success for implementing an advisory board for your business.

1. Select experienced business leaders who will give you honest feedback and challenge you to continue to improve the performance of the business.

2. Aim for a diversity of experience and backgrounds on the board to provide unique perspectives and help you expand your professional network.

3. Agree in advance on expectations of an advisory board member and the advisory board as a whole.

4. Consider using a consultant to facilitate the advisory board. They can help with identifying and vetting advisory board candidates in the initial setup, and they can also provide assistance with developing meeting agendas, facilitating board discussions, and capturing minutes.

Time and time again, we have seen businesses that have benefited from having an experienced advisory board, often composed of business leaders who are from larger companies than their own and who can challenge, encourage, support, and bring new ideas to the table.

If you would like to explore whether having an advisory board for your business might be a good idea, please contact us. We would love to talk with you.

Gray Wirth has served more than 30 years as a leader in corporate, nonprofit, small business, and military contexts. He has successfully led organizations ranging from 100 to 3,100 employees. Gray has lived and worked in five different countries, been a CEO, and accumulated more than 25 years of experience on nonprofit and for-profit boards. He brings experience in executive coaching, strategic planning, and advising boards of directors and business owners. As a Certified Exit Planning Advisor (CEPA®), Gray helps business owners plan in advance for future transitions to ensure that their business, personal, and financial objectives will be achieved. Gray is a U.S. Army veteran and holds a B.S. from Cornell University, an M.B.A. from Harvard University, and an M.A.R. from Westminster Theological Seminary.