In growing their businesses, small and mid-sized business owners often grapple with issues that are outside their field of expertise or not part of their prior experience. Where to turn for thoughtful advice is always a challenge. This dilemma prompts many business owners to form an advisory board – a group of people who come together periodically to provide guidance on key issues that will help move the business forward.
Advisory boards differ from formal boards of directors in that they do not have the legal liability that comes with being on a formal board. Advisory boards members serve at the pleasure of the business owner and generally have little or no fiduciary responsibility to shareholders, if there are any other than the business owner. Many skilled business people are happy to provide you with guidance but prefer to do so in a less formal capacity than serving on a board of directors, so an advisory board can be an attractive option for all concerned.
Having an advisory board can have great benefits. Getting input on key issues from a variety of viewpoints can be critical to good decision making. Also, having an advisory board provides a small business owner with someone be accountable to. Knowing that you’re going to have to report back to your advisory board about your progress toward a goal can be just what you need to light a fire under you.
How do you go about forming an advisory board and how do you work with the board once it’s established? This is definitely something you want to get right. The last thing you want to do is to make mistakes in your recruiting and in your management of this process. An advisory board with the wrong people or one that is poorly managed will be far worse than having no advisory board at all and figuring everything out on your own.
Fortunately, a new resource is available to guide you through this process from my long-time friend Susan Hammond. Susan is a business advisor, consultant and facilitator for small to mid-sized businesses, and she has been working in the field of advisory boards since the early 1990s. This year she published the Advisory Board Kit: A Comprehensive Guide to Establishing an Advisory Board and a companion workbook. Together, these tools guide you through all aspects of successfully establishing and implementing an advisory board.
These topics are covered in-depth: assessing whether your company is ready for an advisory board, identifying and recruiting the right advisors, how to hold effective meetings, and getting the most from your advisory board.