26 Aug Role and Purpose of an effective Advisory Board
Building a great business is not easy and it is something that cannot be done alone, no matter whether it is an established industry leader or simply a startup. Having the advice of an expert/s would ensure success of the organization against all odds. Organizations seeking high quality advice can seek it from its board of directors, advisory board or top management consultant firms and the likes. Here in this blog we would discuss about the role of an advisory board and why it is important to have one and also how it can add value to any organization.
Purpose of an Advisory Board
If you are planning set up an advisory board, then there is one question that you need to ask is ‘why are we setting up an advisory board and what exactly do we want from it?’ The enterprise that is planning to set up the board might seek assistance in anything starting from management of human resource to marketing and anything else. It is important that the enterprise thinks carefully as what would be its advisory board’s purpose as that would only ensure that it is structured in a way so as to maximize its contribution to the success of the organization.
If you are planning to hire the services , the decision to include an outsider directly into your own business can be really tough though, it would help your business grow in the long run. There are many people who do not want to dilute their control over the decisions regarding their company by establishing a board of directors and giving them formal responsibilities as well as authority to take decisions. However, there are many benefits of establishing an advisory board for it enables the entrepreneurs to accept external expert advice and implement them for the betterment of the business.
Multinational companies benefit by running their business with the help of a local company in a specific foreign jurisdiction. However, the same company may not want to handover authority to directors of the local company. An advisory board can help in such a situation by addressing the realities of working in a foreign location along with different business norms and culture and there would not be any loss of control as well. It can serve as feeder group for your company’s board of directors. A Board of Directors works well when the chemistry amongst them is good and their skills and knowledge are appropriate to the needs of the business. However, development of a board of directors that is effective is a time consuming affair and in the interim it always a better idea to observe the contributions and commitment of individuals in an advisory board before appointing them as a member of the board of directors.
When it comes to small business management consulting, a smaller advisory board is more effective than a larger one. The views for the right size of the corporate executive board differ the optimal size depends on the size of the company and various other factors.
Role of an Advisory Board
People who manage enterprises often are need of expert advice and an advisory board is a perfect option for such people. It is more like a safe harbor for all the executives out there as they can test-drive their options as they need to be more assertive and definitive in front of the members of the board of directors. An advisory board can offer you advice regarding all the aspects of your business and can also be created to address one particular issue.