What Is a Board of Advisers? (And Why You Might Need One)
By Indeed Editorial Team
Published January 3, 2022
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
Many companies start small and begin to expand as business owners and executive staff learn how to navigate managing a business. A board of advisers can counsel businesses that need help with growing, meeting certain goals, or advice about business decisions. If you want to learn more about business management that covers all areas of owning a company, you might consider learning about how a board of advisers can help a company. In this article, we discuss what a board of advisers is, what they do and some benefits of having one.
What is a board of advisers?
A board of advisers is a team of experts that works with a business to provide it with strategic advice. A board of advisers differs from a board of directors in that it can offer unbiased help because it doesn't have any ownership of the business. They typically comprise between five and eight members, but the size of the boards is at the discretion of the leaders of the company. A board of advisers provides useful perspectives that might help aid in a company's success.
Related: How To Form a Board of Advisers
What does a board of advisers do?
A board of advisers offers professional insight and advice to entrepreneurs and businesses for many reasons, such as financial, marketing and advertising, human resources and public relations. They act as guides to help businesses navigate the challenges of managing a business and suggest ways of improvement. They work to help a business meet its long-term and short-term goals and help it build upon its successes. Enlisting a board of advisers can help businesses find success more quickly and easily.
Common roles within a board of advisers
A board of advisers typically comprises up to five members. Here are some common roles within a board of advisers:
Chairperson: The chairperson guides the board and focuses on strategic issues while monitoring the group's operations and establishing high governance standards. They play an important role in enhancing each member's productivity within and outside of the boardroom.
Vice-chairperson: The vice-chairperson presides over the board and makes important decisions when the chairperson is away. They keep in frequent communication with the chairperson to ensure that they remain informed about what's going on with the client they work with.
Stakeholder: Stakeholders have a vested interest in the company, often financial. They provide insight into a company's strategic efforts from the perspective of the individuals that you exist to serve.
Secretary: Secretaries ensure the operations of the board run effectively. They ensure they give board members adequate notice of meetings and they record meetings. Their responsibilities may go beyond this, depending on the needs of the board.
Treasurer: A treasurer can make important spending and investment decisions. They may also help choose banks, reconcile bank statements or oversee cash flows.
Benefits of an effective board of advisers
Here's a list of benefits of having an effective board of advisers:
You can maintain control over your company
Hiring a board of directors is a common practice for many established businesses, and it allows them to make big decisions on behalf of your company, including in legal situations. A good thing about having a board of advisers is that they're an external party who can offer several of the same benefits that a board of directors can provide, but without speaking for the company and making important judgments for you and your employees.
They can shield your company from error
Having a board of advisers can help you avoid making critical errors that might hurt your business or employees. Heeding business advice from experienced professionals not only helps your company succeed but protects it from things like financial losses, leaked company data and information, or legal missteps. It can be challenging for newer businesses, like start-ups or smaller companies, to learn everything there is to know about running a business and meeting goals. They, especially, might benefit from hiring a board of advisers to help them navigate those business challenges and set up and maintain a clear trajectory.
They can provide clarity and counsel
A board of advisers provides clear and direct counsel to their clients. It can guide budding entrepreneurs on how to manage complex, important business matters such as recruitment, hiring and onboarding of staff, or filing and maintaining an assortment of company tax records. Because of their education and training, these professionals understand the fundamentals of running a business and other complicated areas of business management.
They often have helpful advice
Many advisers have years of experience managing other businesses or even their own, so their advice is often useful because it comes from tested techniques and strategies. Each adviser may have some experience in different areas of the business, which can supplement the owner's or executive's knowledge. For example, a hospital board may have experts in legal issues and finance to help with lawsuits or managing taxes.
They support the business
An advisory board helps to support a business in its journey toward success. They can act as a business's legal advisers for how to handle lawsuits or licensing issues. They can also review or outline employer and partner agreements and other important documents, accounting for and protecting business interests. It can also give clients and investors confidence to see that you have a team of experts backing your business.
They get to know the business
It's important for advisers to understand the industry that the business is in, so they often do some research to familiarize themselves with the industry, its trends and their clients' business. They get to know a business' audience by looking at critical factors such as their buying trends, what they value, their age, gender or economic status. Advisers also get to know the business they're working for, including a company's mission statement, its values and goals.
They develop strategies for success
Board advisers think of ways to help a business succeed by targeting areas for improvement. They consider the business' goals and come up with a plan of action that can help it meet each benchmark. Advisers identify potential areas of concern and work to prevent them from arising. They also consult with the business owner to learn about their business ideas and goals and try to achieve them while aligning its successes with a company mission statement and values.
Advisers may use existing data for advice
A board of advisers works with new companies and seasoned ones, so they often use existing data from prior business campaigns. They use previous results to study company performance in several areas, such as new product or service launches or promotional advertising. They can also examine existing company data to learn new ways to learn from past mistakes while avoiding and correcting them.
The board may challenge staff
Advisers help businesses understand and manage the company so that they can accomplish their goals and stand out as a competitor in their industry. They might suggest and review performance assessments for staff members, and recommend training or other necessary adjustments for employees. They also make suggestions that might challenge business owners or staff but are necessary for business improvement.
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