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WHAT IS AN ADVISORY BOARD (OR GROUP)?
An advisory board or group (nomenclature interchangeable) is a collection of individuals who bring unique knowledge and skills that complement those of the formal head or board of an organization, in this case you. The advisory group can help run an organization by making recommendations or providing key contacts, information, knowledge, skills, or materials to your organization that you might not have access to independently. Additionally, an advisory group can further aid an organization by the members bringing their status or clout with them to enhance the reputation and reach of that organization (while also benefiting themselves by adding to their own reputations.) However, they do not have the formal authority to make any direct business decisions.
In general, a three to five person advisory board should meet smaller organizations’ needs.
WHEN SHOULD AN ADVISORY BOARD (OR GROUP) BE FORMED?
Any organization should look to form an advisory board when its tasks become too complex or too demanding for the formal head or board of an organization.
HOW DOES ONE FORM AN ADVISORY BOARD (OR GROUP)?
- Determine an objective: The most successful advisory boards are formed with a specific goal in mind. Therefore, when forming a board and company or organization should make sure to think about what supportive roles it wants these advisers to play. This in turn will help the company decide who it wants to be on the board: Is the company looking for diverse representation of industries, age or gender? Is it looking to stay with people familiar to the company or work with new faces? A combination of these? And so on.
- Look for “challengers”: A good advisory board will not be comprised of uninvolved or uninterested “yes” men and women. On the contrary, an advisory group should challenge the head(s) of an organization to think differently about his or her company’s trajectory. To do this effectively, a board will need to have people that have skill sets different than those already in place.
- Use networks: In addition to looking for people whose skills differ from the existing company or organization management, the company should look for people who run in different circles as they can bring new resources with them. That having been said, regardless of his or her background an advisory board member should be willing to participate and interested in your program, otherwise they won’t do or bring very much, despite his or her potential.
- Offer compensation (if applicable): Advisory board members can be compensated in different ways, ranging from a nice meal once a quarter to annual stipends.
- Create a contract: Although more informal than boards of directors, advisory boards should still be governed by some form of written agreement. This could include having members sign a nondisclosure agreement, drafting a charter that outlines a board’s responsibilities, and an agreement on logistics, i.e meeting frequency, expected time commitment, and compensation, if any.
Advisory boards and their respective rules and roles will differ depending on the size of their partnered organization. For example, larger companies may want to have larger advisory boards and smaller or start up organizations should not worry about compensation from the outset. Therefore, parts of the board-forming process are adaptable to your organization and its needs. The only part of an forming an advisory group that should be constant, regardless of the company or institution, is the goal, as this will serve as the cornerstone for building any sort of board.