How to Form an Advisory Board

Advisory boards can give your business a competitive advantage.
Advisory boards can give your business a competitive advantage. (Image: Patrick Ryan/Lifesize/Getty Images)

Contrary to what some may think, establishing an advisory board to help guide the strategy and direction of your organization does not necessarily include appointing your best buddies. It does include balancing the purpose of your organization, the talent available within it, where you want your organization to be in a few years, and the skill sets needed to move it to the next level.

Things You'll Need

  • Mission statement
  • Strategic plan
  • Inventory of leadership talents
  • List of potential advisory board candidates

Establish Corporate Direction, Then Review Available Resources

Prepare a strategic plan, if you don't have one already, that sets out the direction and goals of your company or organization. Regardless of whether you are a non-profit or a for-profit company, make sure that it remains true to your mission. Unless you know what you want to accomplish, assembling an advisory board to help you is pointless. But adding one can give your company a competitive advantage.

Compare the goals of your strategic plan to the roster of your leaders, staff and executive board. Now that you have a plan, take inventory of the talent you have already. List each person with depth of experience and what skill or area of expertise each represents.

Look for gaps in the skills and talent on your list that must be filled. Are you missing someone with legal expertise? Do you have an accountant but not a chief financial officer? Is there only one person with your field's advanced degrees in the company, but to become the industry leader you need more depth? The gaps represent potential advisory board appointments.

Identify candidates with both critical skills and fund-raising potential if you're a non-profit. While for-profits can gain polish and competitive advantage from boards, non-profits must balance skill sets and expertise in the field with the candidates' ability to generate donations.

Assemble a list of potential advisory board candidates: ask your staff, your banker; use your network, those whose opinions you respect, for their suggestions. Don't worry about names with which you are not familiar; the best candidates for your advisory board may be people you don't yet know. Target those with a solid reputation in their field, known for integrity, honesty, and the energy to get involved and help make things happen.

Review your list of potential candidates, comparing their areas of expertise to your talent inventory. Your goal is a complementary set of skills. Make sure there is more than one candidate for each skill area, to move your organization to the next level. Prioritize the order in which candidates will be approached to maintain the complementary mix.

Planning Your Approach

Develop an advisory board position description that outlines the board term and board responsibilities.

Track who recommended each potential advisory board member and see if a personal connection can provide an introduction. If possible, find a way to connect via a mutual business connection or event.

Prepare a formal letter with a finite response date, inviting the prospect to a term on your advisory board. Stage your invitations so you get just the number of board members you need, spread across the gaps you need filled.

Plan an advisory board orientation to introduce them to your company, your expectations and each other, followed by a regular meeting schedule matched to the needs of your organization.

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