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What is an Advisory Board?
An Advisory Board, typically consisting of 3-5 members, provides counsel, advice, contacts and professional skills and experiences that go well beyond that of the company management team. A typical Advisory Board has no governance or fiduciary responsibility and solely focuses on helping the company achieve its goals. Many private companies prefer an Advisory Board so that no control is ceded non-owners on the board, as might be the case with independent members on the governing board.
Some private companies prefer to have independent board members directly on their governing board. If this is your situation, we can assist in finding suitable board members using the same process as we use for advisory boards. We have found that it is rare for a company to have both a governing board with independent directors as well as an advisory board.
With the assistance of this Advisory Board, the company can consider and analyze opportunities without the expense of employing full time professionals. Advisory Boards are not new, but in today's economy they are more important then ever. Most CEOs have peers that they respect and can call on for counsel. They also have benefited from lawyers, accountants and other professionals who have helped them through the growth stages of the business. An advisory board supplements these strong relationships, it does not replace them.
Advisory Board members spend much of their time in complementary business arenas, and bring divergent experiences and information back to the Advisory Board table to assist the company.
Advisory Boards consist of professionals, appointed by a company to address issues critical to the organization. Depending on the company requirements, the Advisory Board may include individuals with industry, sales, operations, strategy, financial, marketing, technology, , investment, intellectual property, or human resource skills. These Advisory Board members can offer perspective on everything from making introductions to sources of financing to targeting niche markets and forming partnerships with appropriate market leaders.
An Advisory Board offers the best of both worlds. A Round Table Group-organized Advisory Board functions like an operational board of directors, as opposed to the honorary bodies that many boards often become. And, of course, Advisory Board advice is always discretionary. Board members offer advice, not governance.
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