The role of an advisory board is to ask questions that would not normally be considered or asked by a business and open up the conversation so that a company can be more strategic. Yet advisory boards are a much under-utilised resource that are often not well understood, claims Steven Bowman FAICD, managing director of Conscious Governance.
Bowman estimates that only 10 per cent of businesses have an advisory board and, of those, only half are effective.
However, he says that for those businesses looking to grow, thrive and change, advisory boards can be an effective tool for strategic growth, particularly for family-owned or entrepreneurial businesses looking for a small group of people to advise in areas they would otherwise not receive advice.
Bowman adds that advisory boards do not need to be significant in size, but can instead be made up of just two to three people, meet a handful of times a year possibly for just two or three years and then be refreshed with new people or disbanded all together.
He stresses that it is important to acknowledge that members of an advisory board are not formal directors of a company, nor are they there to tell people how to run a business and making this clear from the outset is imperative.
In order to create a high-performing advisory board, Bowman suggests incorporating these four points:
- People from industries different to your business
- People with experience based on the direction your business wants to go
- Someone experienced with larger businesses and greater revenue
- People who are willing to ask questions – not those who will tell you how to do things
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