Best Practices: Building better advisory boards

Written by ProfitGuide

Well, there goes the myth that entrepreneurs aren’t open to others’ opinions and despise taking direction. When asked in the latest Best Practices Poll “Should entrepreneurial companies form advisory boards?” 100 % of respondents said yes. However, those who’ve run or sat on boards know that what’s great in theory is never perfect in practice. Here’s what respondents said about how to make advisory boards more effective:

“Advisory boards should consist of a cross-section of diverse people with different skills, backgrounds and experiences,” says Phn. “I look at it as an extension of the management team. Its biggest asset is the contribution of specific skills that an organization lacks or does not require daily. The board should meet on a regular basis, quarterly or monthly, and its core value should be the independent nature of its advice.”

“Advisory boards should consist of key company stakeholders, both internal and external to the company, and should be sourced from a variety of ‘centres of expertise’,” says Shafiq. “The board’s primary modus operandi should be one of giving sound advice and guidance to the senior management team on a range of issues that are currently significant and those that are likely to be significant in the future. Its other role should be one of inspiration (not motivation) to the company CEO!”

“Advisory boards are essential to any successful entrepreneur. An advisory board consisting of people with diverse and extensive experience and backgrounds (i.e. NOT just friends) will give you sound advice and help you avoid the pitfalls that so many of us encounter in our businesses,” says Quon. “They’re mandate should be to advice you on their core expertise areas and they should meet every two months basis in order to maximize time and efficiency.

“One of the best things we did at Wardell was to set up an experienced advisory board early on,” writes Mark Wardell, president Wardell Professional Development. “I included people with a variety of backgrounds including, entrepreneurial, financial, legal, and academic experience. This way I receive an extremely broad form of feedback. The board meets quarterly and focuses primarily on strategy, acting as a check-and-balance system for my ideas, and of course, as a source of new ideas. Our board has also become a tremendous networking resource for me. From the beginning, I made a conscious attempt to include people who were respected and senior business owners and/or professionals. Because of this, no one on the board is afraid to pull their punches. Everyone speaks their mind. If someone thinks I’m off track, they let me know, and I appreciate the direct feedback. Without this kind of honesty, an advisory board has little impact.”

For his answer Mark Wardell wins a copy of Help Wanted: The complete guide to human resources for Canadian entrepreneurs.

Watch for another Best Practices Poll in the next PROFIT-Xtra.

Originally appeared on PROFITguide.com