The Rise of Advisory Boards

Article by Steven Moe

Companies, start-ups and governments are increasingly turning to a new concept of “advisory boards” to provide them with sources of wisdom and expertise.

These are different to a traditional governance board made up of directors who are formally appointed and have legal duties.  Instead, they sit alongside a board of directors to provide them advice on particular focus areas.

Louise Broekman founded the Advisory Board Centre and was recently in New Zealand talking about how these boards operate globally.  I sat with her and heard her life story for Seeds podcast.  She said she initially discovered the power of an advisory board after setting one up and realising how much support it provided.

That first advisory board worked so well that more than a decade ago she packed up her house and backpacked around the world to test and validate their use across cultures and countries.  It became clear there was no professional body or best practice standards for advisory boards and that is how the Centre started in Australia and is now active in 31 countries across the world.

Advisory board members might provide input on specialist topic areas such as the rise of AI, marketing, fundraising or international growth. This approach is probably already done informally by many but with some strategic thought it can be more purposeful with a Chair appointed to lead such boards.

Broekman says: “You have a charter and a really clear purpose, so everyone knows what we’re here to talk about – and what we’re not here to talk about, and there is measurement of impact of what it is that you’re targeting and also choosing those people that are fit for purpose with a skills matrix and also a priority matrix.  What are the priorities of the organisation or the business … it’s all about alignment and making sure it’s impactful”.

Having a clear scope will also help minimise risk that advisory board members are deemed to be directors because of their influence.  Ultimately it is the appointed directors who will be those that have the duties, and liability, that come from making decisions.

Every two years the Advisory Board Centre produces the State of the Market report on the global growth and impact of the sector.  Broekman notes that advisory boards are growing in profile and likely will be used differently in the future as people realise the potential they can unlock. For example, advisory boards do not need to be permanent – some organisations might set them up for a specific defined period to get insights on a particular topic.

You might currently have an informal version of an advisory board so could consider being clear about how this works for your organisation and if there are any areas you would like to improve the impact or operation of the board.  If you don’t have one you may consider setting one up in relation to an area you need support.  It’s worth exploring as a well-structured advisory board can provide you with more expertise to grow your organisation.