Businesses are continually looking for ways to reduce the cost of corporate governance.
Advisory boards have the ability to reduce the cost of corporate governance whilst making the time spent more productive.
An advisory board is a group of like-minded Managing Directors or CEOs that regularly meet to act as advisors to each other. An advisory board does not have the authority to vote on corporate matters, nor a have legal fiduciary responsibility. This dramatically reduces the cost of corporate governance. Many private businesses look to advisory boards in order to benefit from the knowledge of others without the expense, formality or corporate governance issues of a Board of Directors. The costs of membership of an advisory board are similar if not cheaper than employing one non-executive director. This means that you get 12 or more advisors for the price of one!
How is an Advisory Board a More Effective Method of Corporate Governance?
- Corporate Governance: No fiduciary responsibility.
- Reduced Board: Meeting 12 or more like-minded people in similar roles means that you will find plenty of opportunities to develop strategies. So why have the cost of a full board of directors?
- Different Perspectives: An advisory board brings with it a wide range of experiences and perspectives.
- Cost-effective: Typically, it costs the same to join a managed advisory board as it does to employ one non-executive director.
- More productive: With a non-executive director, you will have one person thinking about your problem. With an advisory board, you will have up to 15 other people working on it. This means you will have a wider choice of ideas to work on and develop.
- Structured learning: Advisory boards organised by others often have workshops for structured learning. It is often cost-effective to bring in world-class speakers to help you develop your skills and understanding of the latest business tools and thinking.
- Structured problem solving: Advisory boards run by others have structured problem-solving sessions so that if you have a challenging problem where there is no clear answer or even process for resolving it, then the advisory board’s expert facilitator or chair can provide a structured environment to help you unpack the problem and think through the actions needed to work towards its resolution.
- Share difficult issues: An advisory board is working on your behalf. So if you have an issue with a fellow director or shareholder, then the advisory board is likely to be the only place where you can share the issue in confidence and receive a sympathetic and understanding ear.
- Large network: With 12 or more members in a group, you will have access to a huge network.
- Accountable: Your fellow board members will hold you accountable for you completing your actions which generally means you will complete them.
So when you are looking to grow your company and consider recruiting either an executive or non-executive director, first consider whether an advisory board would be a more productive and cost-effective option.
For more information about an advisory board in your area, please call 0345 053 7417 or email email@example.com