Establishing an Advisory Board (or “Advisory Committee”) is one of the easiest, quickest, cheapest and most effective measures any family business can take to improve the quality of its thinking, planning, problem solving and general decision-making.
The concept is simple: an Advisory Board is an identifiable body, established by a family to help it make better and more strategic decisions on a broad range of issues – by injecting additional authority and discipline into the family’s decision-making processes.
An Advisory Board does not have any formal, legal substance. It relies entirely on the authority delegated to it by the family.
Advisory Boards can become permanent features, with agreed workloads and regular meetings; they can be used as stepping stones towards establishing formal Business Boards (for businesses) and Family Councils (for families); and they can co-exist with Boards and Councils, if that looks like a good thing to do.
Whatever the long term plan, Advisory Boards should always include at least one, and preferably two, non-family members chosen for their credibility with the broader family and their skill in facilitating constructive conversations amongst senior family members on a broad range of business, family business, and pure family topics.
Perhaps the most important attribute of an effective Advisory Board member is their ability to act with courage and integrity when there is a need to provide an honest opinion about the abilities, attitudes, plans, expectations, behaviours and/or interpersonal activities of individual family members, especially those in senior positions in the family business. This is especially relevant when the family business is in the throes of a succession process.
Initially, it’s common to appoint one or more trusted advisers to the Family Board. Once the Board’s objectives, procedures, rules of engagement and general effectiveness have been established, the initial advisers should be replaced by respected individuals who can help the family and the business to thrive, over the long term.
If the advisers enjoy a high level of trust with the family and have demonstrated an ability to provide valuable input on a broad range of relevant issues, they may continue on the Board, alongside the new members. However, if they were initially placed there mainly for their technical expertise (eg: as lawyers or accountants), it may be more appropriate to move them back into their traditional role with the family business.
Establishing an Advisory Board – easily achieved by phone or written application to The Solutionist Group.