An Advisory Board is selected and hired by a CEO or business owner with the sole purpose of advancing the business’ interests. The Board is, essentially, a group of consultants who meet with the business owner to discuss issues faced by the company and offer impartial advice. Aside from that, there are no exact rules about who should be on an Advisory Board Company or what exactly they must do. Those things are mostly at the discretion of the business leader.
Who is on the Board is really up to the business owner. Most corporate executive boards include a lawyer, a financial expert and possibly a marketing expert. However, there can also be experts from other fields and industries. It’s really a matter of whatever best suits the business and what the CEO thinks will best benefit senior management.
Compensation is not necessary for most advisors. They typically join the board as a networking opportunity and the impressiveness of being on the Board of Advisors of a business. They can be paid in cash, of course. They can also be paid in stock options and with other less traditional means. But, in general, they do it for free with the understanding that their participation will be helpful to them later.
Meetings are organized at the discretion of the business management. They should be scheduled regularly, however, and advisors should be given an acceptable amount of notice. Once you have done so, you should choose a setting which is quiet and free of distractions so that the meeting can be held without interruption.
Frequency of Meetings
The frequency of meetings is totally up to the business owner, as well. If the business is going through a rough patch, branching into new territory or looking to innovate, then the business owner may want to schedule more frequent meetings. If the business is not in a period of extreme change, then they may opt to have a meeting every few months.
In order for the meeting to be fruitful and for the business management to get the advice that they need, there should be a formal agenda. It should be written in advance and any important supporting documents should be included. The agenda should be circulated beforehand so Advisors have time to reflect on the issues at hand. When the Advisors arrive to the meeting, they will be prepared to discuss the issues. As the meeting progresses, there should be minutes taken and important notes about action items should be made.
Consideration/Advice on Specific Matters
The Board’s basic purpose is to consider issues important to the business and give advice. Senior management can choose to follow the advice or not. There is no obligation to do what they suggest but, if their advice is not taken, they should be informed. This is a matter of respect.
Advisors should be in continual communication with the business managers. There should be discussions about progress, setbacks, issues and successes which should not be limited to meetings.
Running a Board of Advisors is, in one sense, simple. The business owner, CEO or senior managers have the authority to run it at their own discretion. However, because of this flexibility, it can be challenging to ensure that it is being run well and that the outcomes of meetings are worthwhile and useful.