Tag Archive for "Advisors"
It is important to set expectations and delineate who does what on the advisory board. I’ve found it’s important to think about this before you begin to speak with prospective advisors as the good ones will want to know up front what they’re getting themselves into.
As a consultant on the formation and facilitation of advisory boards I recommend setting expectations by using a Statement of Roles & Responsibilities. The statement:
- Defines roles and who is responsible for specific tasks,
- Reminds people that all information is confidential, and
- Sets the stage to allow for graceful resignations or terminations.
To ensure people take it seriously I also recommend the CEO and the advisors sign the document. While it’s not legally binding, requiring signatures raises the level of importance in people’s minds.
The components of a good Statement of Roles & Responsibilities will include the following sections:
- Overall guidelines to be followed and ground rules.
- Advisor responsibilities.
- Company/CEO responsibilities.
- Resignation & termination.
- Signatures.
Some people may prefer to create a letter. I still recommend the components cover the sections I list above.
As the years progress and your advisory board gets more established it is important to review and revise the statement. It wouldn’t be a bad idea to make it an annual task done at the same time you are preparing to evaluate the effectiveness of the advisory board overall and the individual advisors.
You will find a sample Statement of Roles & Responsibilities in the Advisory Board Kit: A Comprehensive Guide to Establishing an Advisory Board.
As professional service providers we all strive to develop a “trusted advisor” relationship with our clients. A term coined by the guru to professional service firms, David H Maister in the book titled The Trusted Advisor.
I have found as a contract CFO, advisor, and consultant that when this relationship is working at its best I get asked about everything and anything. If I can’t do whatever needs to be done I am expected to know who else might be qualified. Many times the answer is as simple as my client needs to speak with someone with the appropriate background and not hire a consultant. If this happens often enough on a variety of topics it usually suggests a carefully selected board of advisors would be beneficial.
So what are the signs your client might benefit from an advisory board? Consider these ten indicators:
- Your client calls you about anything and everything.
- Your client continues to make the same sort of mistakes because no one in management knows enough about the topic in question.
- Human resource related mistakes are happening more frequently and have potential legal ramifications i.e. bad hires, high turnover, sexual harassment issues and the like.
- The CEO or business owner is making decisions without much consideration and is often so ill-informed that corrections need to be made.
- The company is expanding either through a new product, building a larger plant or new distribution territories.
- The company continually misses key deadlines and is losing credibility in the market place…often an indication of limited or no accountability.
- The company is receiving increased complaints about the quality of their product or service.
- The company has been hit with a law suit that was preventable had external advice, besides legal, been sought.
- A key member of the senior management team has just announced their retirement or has been diagnosed with a serious medical issue.
- The CEO or business owner has announced they want to prepare to sell the business because none of their children are interested in taking over.
I am sure if you could add to the list. Let me know what you come up with.
In the meantime, as a way to continue to be that trusted advisor resource to your client, consider purchasing on their behalf a copy of the Advisory Board Kit: A Comprehensive Guide to Establishing an Advisory Board.
The short answer is…it depends. As someone who works with business owners and CEOs to form their advisory boards and very often stays on to serve as facilitator I remind them that their advisory board should be managed in a manner that works best for them.
The recommended frequency is quarterly. However if you serve on an advisory board of an educational institution you may find you meet only twice a year. I have a client who prefers to meet three times a year.
Preparing for the actual meeting has a lot to do with how frequently your advisory board will meet. I suggest in the Advisory Board Kit that the CEO start planning a month in advance what the agenda will be for the meeting and the materials the advisors will need to review. If the company has a lean management team, too frequent meetings puts additional pressure on the CEO.
If you are trying to determine what the best frequency is for you and your company, I suggest starting with quarterly for the first year. If something comes up between meetings you can either call a special meeting or arrange a conference call.
If you have an advisory board, how frequently do you meet?
Want to learn how to establish an advisory board? Check out the Advisory Board Kit: A Comprehensive Guide to Establishing an Advisory Board.
