Why every business needs an advisory board

Business owners know it’s important to have an inner circle of trusted advisors to whom they can turn and many are implementing advisory boards to assist them with achieving their business goals. An advisory board is a select group of “independent” people who provide advice and support to the owners/shareholders/directors of a business. Their role is to provide nonbinding strategic advice to organisations and hence the informal nature of the board. This gives greater flexibility in how they are structured and managed, when compared to a board of directors and provides owners with a “safe” place to discuss issues of strategic importance and address risks.

For a business, the advantages for establishing an advisory board include:

• Draw on the skills and knowledge of directors/advisors who have practical experience in growing a business
• Enhance the company’s reputation and credibility in the marketplace
• Increase consumer and investor confidence
• Attract superior employees by demonstrating a commitment to company growth
• Create a potential source of members for the ‘main’ board as the company grows
• Test the quality of “outsider” contributions to the business (for family companies)

The size and scope of the advisory board will differ for every business depending on the stage their growth. Each company will need to determine the roles and responsibilities of its advisory board to best suit its particular circumstances and needs. If your business is looking at establishing an advisory board, Maddock’s Accounting & Advisory can assist with establishing or sitting on an advisory board for your business.

Contact the Maddock’s Accounting & Advisory team here to find out how we can help.

“Benefits of an advisory board
• Draw on the skills and knowledge of directors/advisors who have practical experience in growing a business
• Enhance the company’s reputation and credibility in the marketplace
• Increase consumer and investor confidence
• Attract superior employees by demonstrating a commitment to company growth
• Create a potential source of members for the ‘main’ board as the company grows
• Test the quality of “outsider” contributions to the business (for family companies)

Advisory boards augment your core competencies. As a small-business owner, you may not have the deepest experience in every needed space. Setting policies surrounding details such as record-keeping, financial analysis, recruiting and retention … your performance on all these tasks can benefit from highly focused professionals in exactly those spaces.
Experienced board members help you to avoid old mistakes. As you guide your small business from startup to its midlife, building a boardroom of professionals who’ve already faced similar problems to the ones you’re going to encounter can save you professional heartache when it comes to how you tackle growth challenges.

Your board is a simplification tool. Faced with a business predicament, you’re likely working on the problem with all your emotional and professional concerns fully in play. A trusted coterie of advisors can help force you to simplify complications. Just explaining the business challenge to your board can create the kind of breakthrough in which the answer becomes apparent to everyone.”

See the original articles here and here

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