Independence | Advisory Board Best Practice Principles

The ABF101 Advisory Board Best Practice Framework™ has been carefully developed to respect and support the balance required between purpose, people and process to create a strong foundation to advisor engagement.

The ABF101 Framework is based on five key principles –clarity of scope, independence and fit-for-purpose, measurement, structure and discipline.

Let’s explore the “Independence” principle.

Independence for Advisory Boards

On the surface, independence as one of the foundational principles to an advisory board may seem contradictory.  The definition of independence says “freedom from the control, influence, support, aid, or the like, of others.”

What is the Advisory Board for it not to provide support, aid, “or the like” to an organisation?

Within the ABF101 Framework, Independence and fit-for-purpose principles underpin the advisory board’s PEOPLE section.

Independence: The advisory board has an independent mindset with openness, curiosity and understanding in establishing a point of view.

It is valuable to consider and critically assess what “independent and diverse representation” means within the context of a particular organisation and the purpose of its advisory board. The ABF101 Framework principles are not intended to be applied or assessed in isolation.

The ABF101 Framework provides a balanced approach to advisory board structures. It recognises the balance necessary for defining a purpose that is unique to the organisation, applying good governance of people and processes. It enables an organisation to effectively draw on the skills and experience of people in a way that supplements skills within an organisation.

Advisory boards are most often used as a mechanism to gain strategic insight and advice to support critical thinking and robust discussions for organisational leaders. Decision-making and ownership of the outcomes rest with the organisation. Best practice advisory boards are a problem-solving model as opposed to a decision-making model.

Creating a clear separation of the advisory board’s role, both separate to governance and operations, is one application of independence. Additionally, when considering the people that form the advisory board, there is benefit in also applying the Independence principle.

Within the business sector, the most common structure for commercial advisory boards included 2 internal directors or business representatives, an Independent Chair and 2 external advisors.

Corporatised Advisory Boards in larger organisations and advisory boards designed to engage stakeholder representation often include more participants. For example, the recent West Australian Government State Recovery Advisory Group included Government representatives and 24 leading business, industry and social groups.

The inherent flexibility of advisory boards makes them an adaptable structure to fit the needs of any organisation. Ensuring that there is independence, grounds the advisory board and provides a strong foundation allowing for impact and risk management aligned with the advisory board’s purpose.

Importance of Independence for Organisations

• Promotes trust that the advice given is free from personal interest or historical bias
• Gives the advisory board the freedom to explore a wider range of ideas and options, in pursuit of the purpose
• Individuals act in good faith and in the best interest for the intended impact

Importance of Independence for AdvisorY BOARD MEMBERS

• Increases their ability to provide valuable contribution
• Enhances their professional reputation as trusted advisory board members
• Ability to have robust conversations, be open and direct in feedback
• Creates personal accountability for ethical engagement

Considerations for Application

• Considered appointment of advisory board members
• Independence assessment of roles including the chair, advisory board members, sponsor and advisory board manager
• Scheduled process with a declaration of interests including the potential for unintended bias
• In the case where a material conflict of interest or bias may exist, risk is proactively managed

Updated: June 2024, based on the ABF101 Advisory Board Best Practice Framework Third Edition.