If you are looking to redeem your reputation or build a new one, and have selected advisory board members to do that, communications and media will be very important. When and how can you use advisory board members’ names? Will there be a media alert or press release announcing their addition to the board? Is the advisory board member expected or invited to do media interviews on the company’s behalf. Are they prohibited or discouraged from doing interview when the company is involved? How are they supposed to introduce themselves or disavow formal spokesperson capacity?
It is crucial, if the company has selected a member to help support its reputation that the advisory board member not be seen as bought or harnessed. That’s where a solid alignment and ongoing trust between the members and the company are essential. The relationship must be credible.
In some cases, having a honest naysayer in a limited advisory board role may be warranted. Watchdog groups are sometimes tapped to play an oversight role within an advisory board. But, be careful of hidden or political agendas. Some groups may get more attention and improve funding by appearing to leave the board in protest against the company. Even when asked to leave, they may spread rumors that they left voluntarily. Little is gained by the company announcing that they have terminated an advisory board member.
How much information should be shared with the board? While there are critical fiduciary rules that apply to boards of directors, there are no similar legal restrictions for advisory boards. They are creatures of business, not law. That means that any non-disclosure, non-compete and non-circumvention agreements must be entered into. But this can be tricky. Don’t want to be seen as buying off watchdog groups or honest criticism? Gag agreements may give the wrong impression.
And, given the high profile of a typical advisory board member, structuring a non-compete, non-circumvention and non-disclosure agreement that doesn’t cripple the board member’s activities where they can be helpful to the company and acceptable to the member is a challenge.
You brought them in for their ideas. But their ideas have earned them well-respected reputations and attention. Can you really expect them to share lucrative ideas and use valuable connections to help the company, instead of themselves? That’s why ascertaining their alignment and loyalty and repaying it in kind is so important.