Most small and medium-sized New Zealand companies operate without either a formal Board of Directors or alternatively an Advisory Board. I’ve never quite understood why this is, but I suspect that it comes down to our typical ‘DIY’ mentality.
A recent article on Inc.com nicely spells out the benefits of having an Advisory Board:
It’s lonely at the top. However brilliant, energetic, and successful you are, you can’t know or consider everything. Moreover, most leaders recognize that there are a host of issues that they can’t fully discuss with their management teams. I usually found that I spent a lot of time confiding in (and ranting to) my husband; others I know choose parents and siblings. But my husband is a scientist, interested but wholly inexperienced in business; family members want to be supportive but often lack insight or professional experience. That’s what a board is for: to provide (relatively) objective feedback: on your performance, that of your management team, and the company as a whole.
Advisory Board members can give you the high-level guidance you need, without getting bogged down in the day-to-day operations of your business.
Selecting the members for your Advisory Board is critical. You need people whose opinion you trust, such as your Chartered Accountant, and who bring a perspective to the table you don’t necessarily posses. They don’t necessarily need to come from the same industry – many industries face similar difficulties or have the same opportunities presented. Having access to someone who has already dealt with those difficulties/opportunities could prove to be invaluable.
The flip side is traits you don’t want in Advisory Board members. Most notably you don’t want people who want to be involved in the day-to-day operations of the business. Those people are going to hold you back from doing your job, and not provide the high-level advice you need. You also need people who are going to be objective. For example a family member may not be the best appointment to an Advisory Board as they’re likely to believe (rightly or wrongly) that everything you do is great.
The Inc.com article goes on to make the critical point that advisory board members are certainly not there to get bogged down in the day-to-day operations of your business. They’re simply there to give you the high-level guidance you need, without the legal duties of being on a full Board of Directors.
When selected carefully an Advisory Board can provide you with the high level advice you need to help your business earn more, spend less, achieve your goals, or whatever it is you’re looking to achieve with your business. Why not give iif Chartered Accountants & Business Advisors a call to discuss getting your Advisory Board up and running.