If you’re wondering why several organizations are naming advisory boards, there are excellent reasons behind it.
For one, it ensures the company receives professional advice on new trends. Besides, it also gets an in-depth insight on how to navigate and get business in unknown markets. So, let’s get on board to understand the advisory role — who, what, why and how.
Since the phrase “board” is broad-based, an advisory board is sometimes confused with a statutory board.
However, both these boards have clear cut and defined functionalities. For instance, an advisory board does not require votes, term limits, committee arrangements or a comprehensive disclosure of the panel’s role, payment or review.
This allows the advisory board to direct their energies on their core competencies — complementing and reinforcing the existing statutory board by providing specialist expertise, awareness and networking contacts not readily available outside.
Consider them an amalgam of individuals centrally present to provide client advisory assistance. By working as a diverse group of involved specialists, the advisory board plays a substantial role in aiding businesses through economic changes, regulatory reforms and global competition.
Besides, an advisory board can also support the main board and aid the company in selling its products or services to its customers. This group of professional individuals also offer guidance on public relations concerns and reputation management subjects.
Most businesses decide to establish advisory boards due to the expertise that these professional outsiders can bring to the business. Their experience, perception of the subject, and strategic reasoning can help extend the company’s statutory board and management team.
Expert advisory board members can also offer specialist consultation and technical knowledge. They help spread the broad range of talent and management understanding in areas not readily accessible.
When companies look to forming an advisory board committee, they need to seek out whose skill sets complement the current board. At the same time, the company must also remain heedful that the advisory board must not be employed to conceal rifts in knowledge or skills that legitimately belong on the main board.
After all, an advisory board’s role is to provide access to talent that the main board would otherwise be unable to tap.
There needs to be a crucial balance between an advisory board and the statutory board. When looking into the structure of advisory board members, the company must express the skills and experience they need that are absent on the main board, rather than duplicate skill sets.
A successful advisory committee must be clear about its mission. When selecting an advisory board, the company and advisory directors must have a standard view of the time involved. By agreeing to commitments, both sides must then adhere to them.
When alerting the company on relevant developments or important networking contacts, both sides must hold a two-way dialogue.
And because there are no formal responsibilities or liabilities attached to them, an advisory board has the advantage of being agile, adaptable and holds the benefit of focusing on a defined set of issues to resolve.
They hold relevance in adding value to:
However, there is no one-stop-shop solution in how an advisory board must work. Still, regardless of the customized manner in which it adapts to the organization, the advisory committee must clarify its purpose and mission from the outset.
A suitable board of advisors with a specified mission and the right combination can be a compelling, value-added asset in a dynamic business environment.
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