An advisory board is an effective way for businesses to access independent external advice to support their business ambitions and strategy. To be effective and sustainable, an advisory board benefits from having a best-practice foundation. This allows for a flexible application of the advisory board model to suit the individual needs of the business.
Best-Practice Advisory Board Principles
When creating an advisory board, in most countries it is not governed by specific legislation.
Unstructured, informal advisory boards can be far less effective at solving problems and achieving intended outcomes.
Therefore, as an independent industry group, we saw the need for and established, research-backed, evidence-based best-practice principles to facilitate the operation of effective advisory boards around the world.
Advisory Board guidelines
Best practice typically involves several key elements:
Note: more detail regarding these specific guidelines and processes are detailed in our Advisory Board Best-Practice Framework and taught in detail to participants of the Executive Advisory Board Chair Program.
An establishment and review process
A formalised advisory board requires careful planning, preparation and review. An independent advisory board Chair who has been certified in best practice standards can support a business in setting up and facilitating the advisory board. This ensures the advisory board structure complements the internal meeting and decision-making eco-system between management and the responsibilities of directors.
Once established, annual reviews of business and advisory board performance ensures alignment and flexibility as the needs of the business change.
Advisory Board Charter
The Charter is the cornerstone of the advisory board function. A Charter includes the advisory board purpose and scope, meeting protocols and engagement protocols of advisory board members.
Independent Certified Chair™
Businesses will benefit from appointing an independent chairperson who has undertaken specific professional development in advisory board establishment and facilitation. The role of the Chair is to assist the business to establish the advisory board framework and facilitate the advisory board function on an ongoing basis.
Best practice for an advisory board is to appoint one to three external advisors. Their role is to provide strategic insights and advice to support problem-solving conversations
Advisors require the experience, knowledge and acumen that has been identified as a need within the Charter. Advisors also require an understanding of the advisory board protocols, roles and ethics guidelines to ensure their roles contribute within the framework and boundaries are managed between the roles of management and directors.
Just how to run an advisory board meeting can be a black box for the unacquainted. A formalised advisory board is inherently flexible in nature, but within that flexibility there needs to be structure, and meeting protocols fit-for-purpose for the business. Protocols include meeting schedules, board report preparation, agenda format, minute/record keeping and economic impact measurements.
Economic Impact Measurement
Measurement of any Board or Committee performance enables clarity of purpose to the goals or intentions of the group. Economic impact measurement is ongoing as part of the best practice standards. Measurement prior to the advisory board commencement provides an internal benchmark for the advisory board and the Certified Chair™ to work from.
Annual economic impact measurement enables the advisory board to identify progress and changing needs of the organisation. It provides rigour and a level of intellectual honesty to the independent nature of the advisory board.
The advisory board Charter sets out the intended tenure of the advisory board structure. Due to the flexible nature of the advisory board model, the board structure can generally be terminated at any time. Project-based advisory boards are time-specific where the term may be for 90 days to 18 months.
The tenure of individual advisory board members can vary based on the needs of the business. As the needs and priorities of the business shift and change, it makes sense that the members of the advisory board may also change. This allows for independence to be maintained as well as a fresh approach and fit for purpose advisors.
Best practice standards for advisory boards are underpinned by independence. This includes several elements:
- The Chair is independent of the business. Therefore, they are not a director or a service provider to the business.
- The external advisory board members are independent of each other. They are appointed on an individual basis with the business. It is recommended that external advisors should not be service providers or shareholders. This provides assurance to the organisation that no undercurrent or hidden agenda exists within their advisory board framework. Due to the flexibility of advisory board structures, this may vary.
How We Can Assist
As mentioned above, we have created specific guidelines and processes which are detailed in our Advisory Board Best-Practice Framework and taught in a practical setting to participants of the Executive Advisory Board Chair Program.
We provide a practical way for businesses to increase competitiveness, foster innovation and drive economic impact through effective engagement with advisors.
Businesses can also access the Advisor Concierge service. The Advisor Concierge is a guided service that aims to connect businesses to highly experienced board Chairs and advisors for advisory board engagements.
Aspiring advisory board members frequently take advantage of our professional development and education programs. These programs are setting the global standard for independent advisory board education. The Executive Chair Program is proving especially popular as is general membership as a vetted Approved Advisor.
If you are looking for reports on the state of the global advisory sector, frameworks and other information, browse this site or contact us directly.
If you still have questions, our Fundamentals are a goldmine of information that will answer other questions you may have.
Listen to this podcast interview with our founder, Louise Broekman.