Over the years, I’ve been honored to be asked to participate on advisory boards a few times. Each were positive experiences for me and one I’d recommend with a caveat to understand your role before accepting.
An advisory board typically differs from a corporate or nonprofit board of directors because these aren’t elected positions. Advisors aren’t officially elected to the seat nor do they have a fiduciary responsibility for their actions. They are advisors only, not directors.
My first experience was for a large corporation and another was a small business. Both were valuable experiences that enabled me to gain an insider’s look at the company, learn more about the respective industry and offer my advice. Both were unpaid except for a stipend to travel to the meetings.
The larger corporation was a regional grocer and the experience was very structured with a formal interview before I was offered the position. Once on board, there was an agenda for each in-person meeting, engaging discussions, and diverse opinions on the topics followed by light homework before the next meeting. It was an educational experience for me and rewarding to interact with the other advisors. There was always a room full of company employees listening to our comments and observations about the various topics. I was impressed by their follow-up afterwards via email with responses to questions they couldn’t answer during the meeting.
The small business advisory position was more intimate and less structured. The CEO, whom I admired, asked me to participate personally. Upon agreeing, I found the experience to be very different. Each meeting with the other advisors was via a conference call and without an agenda. So, there wasn’t an opportunity to give any forethought to what I could contribute to the conversation. The CEO used this as an opportunity to update us on the company’s accomplishments or in-depth explanations about upcoming plans. He sought our advice occasionally and we responded with comments and challenges that he pondered and took to heart. You could best define this advisory board as his accountability partners.
What strikes me as the biggest difference between the two experiences was that one was a listening event for the corporation and the other was a listening experience for the CEO. One enabled me to contribute to the organization’s various business units while the other enabled me to influence the CEO’s thinking. My point is, all advisory boards don’t work the same way from my experience, but each serves a valuable purpose.
If you are considering an advisory board for your business, then may I suggest you give thought to these points:
- Determine why you want an advisory board before you ask anyone. The advisors are different then your corporate or association/nonprofit board, since they have no fiduciary responsibilities and you don’t report to them. So what function can they serve you? Will it be a board that you want to seek and listen to their advice? Or, is it a board that you plan to use as a focus group for your own thoughts and plans? Are they customers? Are they industry partners or suppliers? If they are peers, can your ego handle their frank comments and participation?
- Set your expectations with the advisors upfront. Be frank about what you don’t expect from them? For example, if you don’t plan to give them your financial statements, then tell them. Define if they will be communicating with only you or your management team.
- Choose wisely. I can’t overemphasize the importance of choosing advisors wisely. Only you know the type of person who will serve you well, but my advice is to choose individuals you respect, who share your values and who have walked in your shoes at some time. For example, an entrepreneur who has grown a business or has expertise in a product line you’re exploring could be a good fit.
- Define parameters. Once you’ve affirmed that you want an advisory board, address the responsibilities of the position with them. Is there a stipend? When are their meetings/calls? What’s the meeting format? Are confidentiality agreements needed? How long is their term (I recommend no more than one year. You’ll need fresh ideas by then.)?
- Prepare to give them an advance agenda. Nothing fancy is needed, just some general topics may be enough. Most often, they will be better able to contribute their knowledge and experiences if they’ve prepared for the discussion.
- Listen to their input attentively. You may not always agree with them, but their intentions are most likely in your best interests. And, they are making time to focus on you and your organization. So respect their time and advice.
- Get to know your advisors personally. Determine if there’s an opportunity for you to reciprocate and offer your expertise, your contacts or other talents to them. Introduce them to potential customers or business partners if it’s appropriate.
- Follow up with them. Because they are advisors, they will appreciate knowing when you took their advice. You owe them that.
Remember, you aren’t marrying an advisory board, so if it doesn’t work for you the first time, then be honest with them and call it quits gracefully. Once the timing is right, it can be a mutually beneficial relationship that can help you to grow personally and professionally as well as your business.
