The chair’s role in culture and conduct
A good chair holds themselves and others on the board and executive to account.
OPINION: I currently have four independent directorships (currently chairing two boards). In my consulting role I work as a strategist, high performance leadership coach and adviser to a number of boards of directors. At any one time a number of our client companies are restructuring advisory boards or establishing them for the first time.
In my opinion establishing an advisory board is a great way to add some real value to a business. It is a safe way to test the waters as to whether a formal board structure is the right course of action and a safe way for long term business owners to get their heads around this option. Interestingly founders having had an advisory board and then going on to establish a full board often reflect that they wish they had established the formal board from the get go. That said there is usually a healthy desire for an advisory board as a logical stepping stone.
The purpose of an advisory board is to allow the directors of the business to access regular strategic advice from a group of trusted advisers familiar with the business who can contribute to the future success of the business. It’s also a robust platform for working on the business rather than in it.
The IoD's Four Pillars of Governance Best Practice - Chapter 1.10 Advisory Boards is good reference point. I particularly like very first headline bullet point - “Advisory boards provide advice but do not make decisions and have no authority to govern.”
Legally an advisory board offers advice which the directors of the company can choose to adopt or not. The advisers are effectively operating in a consulting capacity and the minutes must be careful to note that these conversations are such. This prevents those advisers from being deemed as acting in the capacity of a director.
In my experience the key advantages of establishing an effective advisory board are:
There are a number of ways to approach the implementation of an advisory board and certainly every situation is subtly different. Getting this right can really allow a business to get key break throughs and to realise their potential.
Kendall Langston is a partner and strategic business advisor at Pivot & Pace. He has been a professional leader for over 30 years, a journey that continues to energise, challenge and one that he remains passionate about. Leadership has taken him around the world as an army officer, consultant, board chair, independent director and chief executive.
The views expressed in this article do not reflect the position of the IoD unless explicitly stated.