The definition of an Advisory Board sits within its name. The purpose is to strategically advise management of a business, organisation or corporation with the objective being to deliver key business benefits.
Where an Advisory Board differs from a Board of Directors is the level of authority, responsibility and accountability in the business decision processes. An Advisory Board is well positioned for businesses to tap into the knowledge and experience they need to make informed decisions. They are a great problem-solving resource.
Advisory Boards: 10 Key Business Benefits
Opportunity – Advisory Boards do not work ‘in’ the business and are therefore impartial in their advice. Their mandate is to work in the best interest of the business. Advisory Boards help evaluate strategies and analyse trends and can also bring rigour into the business.
De-Risking – The ‘helicopter’ view of the business operation enables Advisory Boards to determine where risk is high and how it could be minimalised.
An Advisory Board is a low-risk investment for a business. The Advisory Board is not a decision-making board with the associated legal and fiduciary responsibilities that sit with a Board of Directors.
This means that the control of the business operations remains with management, however, decisions are more informed if an Advisory Board is in place. The business’ access to an Advisory Board’s valuable expertise and experience brings insights that otherwise would not be readily available or accessible.
Focus – An Advisory Board may be appointed to focus, without distraction, on one part of the business giving parameters and guidelines around the desired outcome in planning and execution. This can pay dividends by allowing the business to concentrate on running the core business.
Clarity – Advisory Boards can help businesses to understand how to optimise their business roadmap. To be successful a business must have clarity in the strategic piece it is operating from. This is important, not only to be proactive in the market but also to understand what the business wants to achieve in the short, medium and long term.
Innovation – The identification of gaps and opportunities is important to give the business every advantage possible. Advisory Boards are in a unique position to advise on where innovation can be a game changer for a business. The ‘noise’ that every business has in the day to day operation of the business often stops innovation from being considered as a priority.
Agility – Businesses are faced with many challenges. Businesses put processes, platforms and programs in place to make this easier, but often this creates legacy systems that can stifle or stall productivity which impacts morale and motivation.
Value – An Advisory Board provides intellectual, social and creative capital when leveraged, delivers measurable value for the business.
Change – Advisory Boards are often put in place as a catalyst for change and progress. They offer an opportunity to accelerate the growth and scaling of the business. This brings an injection of educated insight and innovation to help the business to stay ahead of its competitors. This enables the business to be competitive and work towards future-proofing operations, delivering benefits to the business in the now and into the future.
Impact – An Advisory Board can positively impact the business’ vision, profitability and stakeholder engagement. The business story then becomes one that when communicated creates momentum and visibility.
Networking – An Advisory Board will broaden a business’ perspective and connects business to a broader knowledge base. This nurtures collaboration and communication, increasing the business reach.
Advisory Boards are often sourced by the business based on perceived needs. This often occurs in the absence of independent accredited advisory board centres.
In Canada, a study was run on the benefits of Advisory Boards for SME’s with extraordinary outcomes that demonstrate the advantages of engaging with an Advisory Board.
Some of the highlights were as follows:
Statistical analysis of businesses’ financial variables based on fiscal data from Statistics Canada shows that: Sales growth was stronger after instituting an advisory board. In the first three years after an advisory board was set up, sales grew 66.8% compared with a growth of 22.9% in the three previous years. Productivity growth also strengthened after the advisory board was introduced. In the three years after the advisory board was set up, productivity rose an average of 5.9% compared with 3.2% in the previous three-year period.
Originally posted 2017-07-23 18:54:42.