Advisory boards can benefit any business, but not all companies have the resources to attract the highest calibre advisors.
However, the right strategy and some careful planning can help any business attract a strong and productive advisory board. Establishing strategic house rules will facilitate the valuable discussion that will provide the greatest insights and guidance.
Here are 7 house rules you should consider when forming your advisory board:
Rule 1 – Define the Role of Your Advisory Board
Ask yourself, what specific issues do you want your board to advise on? Will there be a range of items or a specific few? Determining the role of your advisory board is a critical first step.
The best way to identify what your focus should be is to look at the issues your business is currently facing. Where could you utilise some external support? These areas can include cash flow or other financial matters, launching a new product into the market or adopting new technology. Knowing how you wish the board to serve is the foundation of its success.
Rule 2 – Prepare Your Advisory Board Members
Compile a list of potential candidates to serve as your board members. These may include mentors or customers: who are they? What do they do? What are their interests? Are they already using your service?
Once you’re clear on who your preferred candidates are, prepare a short brief outlining what your company does. Include your organisation’s vision and goals. Communicate the aim of this board and the role you wish them to play. Specify the amount of time you’re asking them to give (whether it’s paid or unpaid).
Rule 3 – Diversify Your Advisory Board Members
The individuals you bring on board must know how to solve problems and have fantastic communication skills. Ultimately, they should be experts in their field (if executives or other business owners) and should have extensive experience. Cross-industry knowledge is an added bonus. In fact, mixing up your board members will give you a holistic view and diverse perspective on your business.
Rule 4 – Outline the Roles of Your Advisory Board Members
Once you’ve established your advisory board, create written agreements that outline the roles and responsibilities of the board members. Include the length of time you require each member and what insights you hope to gain from them. All members should sign non-disclosure and confidentiality agreements. It’s your responsibility to protect your business from any information potentially shared with your competitors.
Rule 5 – Incentivise Your Advisory Board Members
Most advisors will not agree to serve on your board without some form of compensation. Consider incentivising your board members with monetary compensation. For interstate or international travellers, you should consider covering their travel and any overnight accommodation expenses.
For those who aren’t able to attend physically, explore conferencing options available. Otherwise, you may award a fee per meeting. The organisation should also provide catering and refreshments. Think of it as inviting over some valued friends for dinner, how would you make them most comfortable and what would you provide? Setting a relaxed and comfortable space for your board members will ensure you get the best out of them.
Rule 6 – Be Open to Discussion
The advisory board is a learning forum; not a decision-making forum. This is a time of exploration. The meetings are an opportunity for your board members to offer feedback on specific products and services. Or, maybe they’ll provide ideas for the implementation of new strategies.
It’s important that all communication is received with an open mind. You won’t be required to adopt all recommendations, but it’s important to take all insights into consideration. Identify the specific points that the majority of your board members agree upon.
Rule 7 – Keep Your Advisory Board Members Updated
Communicate and share the resulting actions, data and information that have resulted from the meeting. Your board members will appreciate staying in the loop, because they want to know that their advice has been considered.
If you achieve milestones, tell your board members. Find the most appropriate way for you to share updates, whether through emails or conference calls.