Wouldn’t it be nice to draw on the skills and expertise of other experienced businesspeople who have “been there, done that?” You’ll get all that and more by putting together an advisory board, says Wanda Dorosz, Chairman and CEO of the Quorum Group a fund manager with offices in Toronto and New York. In addition to the ideas and advice you’ll receive, says Dorosz, a board can help your company grow and mature, attract capital and provide credibility for joint ventures.
But where to begin? Dick Marty, managing director of ExecuCounsel, a business consultancy in Toronto, advises starting small. Aim to recruit three or four people to start. That way you still get a mix of opinions and expertise without the administration getting too unwieldy.
“Take your time in selecting who you think would be optimal,” adds Dorosz. “This is not something you want to jam together in a week.” Make a list of the expertise your company could benefit from. (E.g. Do you need marketing advice? Financial advice?) Then think about the people you know or have heard about who might fill these roles.
Put yourself in the shoes of potential board members, says Dorosz. Ask yourself why your company would be interesting to them. Consider candidates who might benefit from being on your advisory board. “Try to attract people who are not otherwise available on an hourly rate,” she suggests. You’ll want individuals who are flexible and open to new ideas, who also have time to contribute to your business.
Once recruited, communicate honestly and openly with your board. Let members know why they were chosen and what you hope they can contribute. Share your mission, goals and your strategy for achieving those goals.
Meet at least quarterly to start, suggests Marty, and more frequently if your company is in the midst of a major deal or looking for capital. Be prepared to update members on your firm’s progress.
Of course, all this advice won’t come free. You’ll have to compensate your board members for their time and experience. A good benchmark is the hourly rate that a local lawyer or accountant would charge for her time.
Creating an advisory board may be the single most important move you make to add value to your company, says Dorosz. “Be extremely disciplined,” she says: “Do what you say you are going to do to win their respect.”
© 2004 Jennifer O’Connor