Why are you considering creating an advisory board? Is it to add expertise? To provide air cover by letting their reputations speak for yours? Do your competitors have advisory boards of their own? Is it to better understand your important markets or stakeholders? Is it for good will? Or media attention?
If you are serious about having one, make sure that you have clear goals, articulate those goals and get your prospective members to commit to those goals.
2. Is your goal worth it? There is a cost to developing and maintaining an advisory board. Compensation is an obvious cost, as are stock grants or options. But other costs aren’t so obvious.
There are opportunity costs. For every advisory board member you appoint, there is one that you didn’t. This may involve hurt feelings and the possibility that the ones you passed over may not be there when you need them.
Political scrabbles are a cost as well. Working with advisory board members can be like herding cats. Each has their own perspective, experience and agendas. When you hire people like this, you have better control over them than you do when they are asked to contribute their brand, networks, media clout and reputation outside of their fulltime work.
Scheduling is always a challenge. The busier and more important your board members, the harder to schedule a time when they can all meet face-to-face. Virtual meetings can be scheduled instead, but are rarely good to real advice, sharing of ideas or directions. Email communications are too often handled by handlers, not the person who holds the seat. But real life meetings put enough strain on the already overburdened schedule of the top choices for advisory boards that the preferred appointees may not be able to commit.
Your managers will devote substantial time to informing the advisory board, getting their input and developing communications. Can anyone reach out to an advisory board member, or are they managed by a department, division or person? There are manpower and structural hard costs for creating a system and adhering to it. Legal and compliance teams have to be involved in creating the policies for the advisory board members and the board itself. Conflict-of-interest policies, indemnification terms and insurance coverage should be considered and, if appropriate, adopted.
More to follow…