Ask the Advisors – Should I Consider Having an Advisory Board?

Lawrence A. Simon

As a business owner of a mid-sized company, should I consider having an advisory board?

Whether large or small, companies are constantly challenged by the operational and financial facets of navigating their business. Establishing a strong board of advisors can create a powerful tool that can make a huge difference in seeking objective advice, understanding the marketplace, gauging future needs, seeking strategic positions and building new customer relationships.

Unlike corporate boards, advisory boards have no fiduciary responsibility and the advice is non-binding. Many advisory boards are very active, including monthly or quarterly meetings focused on a wide range of topics addressing the company’s short- and long-term objectives. Most importantly, these individuals can represent a company’s sounding board for problem solving, exploring big-picture opportunities and playing the role of devil’s advocate for management.

How do I form a successful advisory board?

Building the right team of advisory board members is a critical first step. Understand the specific skills of potential board members. You should seek problem solvers and individuals with strong communication skills, expertise, experience and a diverse skill set. Make sure they are able to meet your expectations related to time commitment and responsibilities. Also providing compensation will enable you to attract the best talent and benefit from a strong commitment.

Determine if your advisory board’s objectives are general in scope or specifically targeted to your industry, technology or your company’s attempt to grow.

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Lawrence A. Simon, CPA, is a Shareholder in Doeren Mayhew’s Michigan office and can be reached at 248.244.3225. For more information on forming an advisory board for your business, contact our business advisors in Michigan, Houston or Ft. Lauderdale.