Should you form an advisory board?
As a business owner, you may feel that you are not large enough to put together a formal board of directors that can provide assistance in running your business. If that is the case, an advisory board may fill that void.
Most owners have done a nice job of building a trusted internal team that runs the day-to-day operations, but that team may not have the time to fly at 30,000 feet and address strategic planning opportunities or other issues that may impact the business.
This is where a board of advisors can add value. It should be easy to coordinate because the participants will be the advisors with which you already have a relationship. We recommend the advisors be some combination of the following: CPA, corporate attorney, commercial lender, insurance agent and any other trusted advisor that has worked with the company. The business owner, or CFO/controller, already has a relationship with these individuals and meets with them individually on a periodic basis. Our recommendation is to formalize this group and meet on a structured schedule, either quarterly or semi-annually.
The purpose of an advisory board is to get the owners and the management team out of the daily grind and discuss issues that are critical to the company’s success and could benefit from outside perspectives. The company’s advisors collectively have hundreds of other clients, and that experience is vital to a business owner. We recommend having an agenda, minutes and action items from these meetings.
It’s even possible your advisors would participate “pro bono” in exchange for being more involved in your business.