Nonprofit organizations and entrepreneurs typically operate with more limited resources than their for-profit and more established counterparts. Regardless of their constraints, be it financial or headcount, both often rely on various resources outside of their day-to-day staff in order to achieve success. Of those resources, one of the most important is an advisory board and the support, knowledge and insight it can provide if effectively assembled.
What is an advisory board?
It’s important to differentiate an advisory board from an organization’s board of directors. A board of directors is responsible for the high-level decisions that guide a corporation’s managerial and fiscal policies, and an advisory board should address needs that fall outside of this scope. And whereas state laws mandate a board of directors for both public companies and nonprofits, an advisory board isn’t legally required. Because of this, advisory boards hold no formal authority, and any votes taken are ultimately non-binding recommendations.
Things to consider
Before establishing an advisory board, the most important question to consider is why you want one. Have you been confronted with a set of circumstances that are unlikely to present themselves later, or are you seeking general and open-ended guidance? This is important for determining if the advisory board will be temporary or permanent, as well as its composition. You should also keep in mind that, regardless of the duration of the advisory board, it’s members will expect compensation of some sort. This is an especially important consideration for nonprofits and start-up entrepreneurs who may have limited financial resources.
Forming the board
Regardless of the advisory board’s duration, it should be made up of members who will fill in knowledge gaps and bring valuable insight to your nonprofit or organization. There is no sense in assembling a board whose members’ expertise overlaps with each other, other individuals in your organization or your own.
With that in mind, the individuals you select shouldn’t be “yes”-individuals either. Instead, your advisory board should be constructed similarly to President Lincoln’s famed ‘Team of Rivals’: Each member should provide unique contributions, independent thought and have little reservation about voicing disagreement. Our advisory board, for instance, consists of Scotty and Tiffany Smiley, the co-founders of Hope Unseen and experts in perseverance, and Chester Elton, a bestselling author who specializes in leadership and employee engagement.
Once you have identified the fields of expertise you want your advisory board to bring to the table, target the most high-profile candidates you can – even if you know they might turn you down. But does that mean you shouldn’t try? No, because, even though you might be rebuffed, you’ve demonstrated several positive character traits: Respecting others’ accomplishments and fearless ambition.
Respect and ambition are big drivers for successful relationship building. When forming your advisory board, it’s important to respectfully pursue potential candidates with a clear and concise vision for your organization. Chances are, even if your approach is declined, they may be able to recommend someone else for the position you seek to fill if they’re unable to help, and you may even approach the individual again further on.
Finally, try to keep your advisory board small. The ideal size would be either three or five members. The smaller size will make it easier for you to clearly define the members’ roles and responsibilities, as well as the expectations you have for them going forward. The limited size of the group also provides more flexibility for organizing meetings and can ease some of the pain of reaching a consensus that is more common with larger boards.
Engagement and maintenance
Similar to a board of directors, advisory board meetings occur infrequently – often quarterly. Because your advisors are going to be assisting you with the more granular aspects of the business, some form of monthly communication should be established. Whether the depth of that communication is heavily-detailed like a financial report or just a simple status update is entirely your call, but maintaining a consistent line of communication is best to make sure your advisors are aware and engaged.
To that end, and if the size of your organization allows for it, you should select a member of the board of directors to be a liaison to your advisory board. If you’re an entrepreneur or work in a small-staffed organization like Camp Corral, then you might find yourself as the default liaison. However, as your organization grows and your efforts become more spread out, someone else will need to take on the task of maintaining regular communication with your advisory board.
If your advisory board will be more permanent rather than temporary, you may want to consider term limits for its members. This allows you the opportunity to consistently bring in new and fresh opinions – businesses are constantly changing and growing and your advisors should reflect that perpetual change. Term limits will also help you avoid potentially awkward conversations should a board member contribute less than you’d hoped.
The most important action you can take with your advisory board is to trust them. This is a group of people that have been hand-picked for their expertise to help you close your own knowledge gaps. If they make a recommendation, listen and consider their advice – it’s what you are compensating them for and what they are taking time out of their personal schedules to do. Your advisory board will quickly become disinterested if their recommendations are consistently ignored, which will negatively affect their commitment to you and the quality of advice – if any – that you receive from them.