When and why should you set up an advisory board

Whether you are running a start-up or an established enterprise – an advisory board can bring value by providing high-quality advice and insights. Advisory boards consist of individuals brought onboard to provide “non-binding” strategic advice to the company.

Board of advisors Vs board of directors

An advisory board offers a more flexible and less formalized setup than a board of directors. For example, you may want to engage with an advisor for a limited period of time to tackle a certain challenge or create an ad hoc relationship where the advisor steps in as needed. Furthermore, there is no dilution of control and authority in making business decisions. The benefit of such a structure is that it can be adapted to your business needs as there is no one right way to engage with advisors.

Finding the right match

Do you need an advisor right now? And what kind of engagement should you arrange with them? The answer to this begins with understanding your current business context and needs. Advisors are often found through business networks and mutual contacts. A more standardized approach would be talk to a consultant who works with a network of advisors and is trained in matching organizations with external advice.

Such a consultant would talk through which phase your business is in and to what specific areas do you want to bring this external viewpoint. Do you need an entrepreneur to guide you through growth strategies? Or a lawyer to bring in legal advice? Or a policy expert to navigate complex geo-political trends?

Below are some key areas under which advisors are usually sought:

• Risk Advisory: Advice on the various risks associated with finance, business, talent and compliance
• Capital Raising and Financial Advisory: Advice on the when and how of raising capital. Reorganization & restructuring of financial assets and liabilities and creating the most beneficial financial environment for the company.
• Talent Management: Advice on hiring, retaining, and managing talent and ensuring maximum utilization for maximum productivity.
• Business Advisory: Advice on managing business, developing products, marketing, research and development, and improving operations.
• Creating Partnerships: Advice on creating and fostering partnerships with founders with the right value systems.
• Technical Advisory: Advice on technical aspects of the product and market research to ensure management strategies are implemented.
• Go-to-market Strategy: Advice on the right marketing strategy – when, where, and who to sell.
• Operations and Scaling Up: Advice on operational excellence and scaling up of business for the next level of growth.

The right advisor for your business can be an industry leader or a subject matter expert or an entrepreneur themselves or none of the above. The trick is to ensure you explore your options by consulting with someone who has access to a wide network of advisors.

Have more questions regarding the composition of your advisory board and whether this is the right fit for you? Contact us for a private session with the author of this article, Shruti Swaroop. Or talk to us to find your match.