Part 7: Advisory Boards – everyone is doing it
For people who are newly coming to understand Advisory Boards (ABs), and who might be considering the significant benefits of setting one up, a common question is … who else is doing it? Today, we’ll address exactly that point.
Before we see the extent to which business globally are growing their use of ABs, let’s see how we got here.
• In [Part 1], we discussed what an AB is, and how it’s used to support governance and to avoid (and solve) problems. We looked at a few types of ABs that exist.
• [Part 2] compared ABs to the Board of Directors (or Governance Board). ABs are typically appointed by the C-suite or senior management, do not make binding decisions like the Board, and can be established for any number of reasons. This flexibility allows ABs to be used to avoid or solve very specific problems.
• We saw in [Part 3] what a typical AB might look like, including total size and the split between executives and independents. The role of the AB Chair was discussed.
• To avoid a common point of confusion, in [Part 4] we compared advisors to consultants, showing how they serve a very a different purpose, with very clear advantages in different circumstances.
• A well-structured AB has clarity-of-scope, advisors who are fit for purpose, objectives which are measurable, and more. All of these points, and many others, are included within the ABs governing Charter Document, which was discussed in [Part 5].
• Finally, we showed in [Part 6] that ABs do not compete with the Board of Directors, but instead they support it, help enhance governance, take pressure off the Board in key areas, and make it easier for them to focus on what they should.
As for the question of who else is doing it, the answer is … everyone.
• From sole-director businesses to start-ups, massive corporations and governments, more and more ABs are being set up.
• In the financial sector, ABs can be found in insurers, banks, pension funds and family offices.
• You’ll find ABs in companies such as Aon, Deutsche Bank, Palantir, Airbnb, Glassbox, Binance and the Actuaries Institute of Australia.
• There are many ABs to be found in governments around the world too. For example, Australia – in the aged care space – recently made legislative changes which require relevant organisations to establish not one, but two Advisory Boards each – a Quality Care Advisory Body and a Consumer Advisory Body.
If your organisation had access to a group of suitably qualified, experienced, independent professional advisors – where would the best place be to start them off?
Which area is best suited to your first AB? What would you task them with, and how would you measure the results?
We’d be happy to discuss your options with you, and brainstorm ideas for the ideal structure and terms and goals for such an Advisory Board.
Please continue reaching out – let’s talk.
Written by Jonathan Watkin & Greg Solomon