What are Advisory Boards Roles & Responsibilities?

Advisory boards are becoming an essential part of modern governance, offering both executives and organisations clear advantages.

What is an Advisory Board?

An advisory board is a structured, collaborative method for organisations to engage with advice. Advisory boards act as a sounding board for either the organisations’s owners, executives, directors or shareholders.

Advisory boards are useful from scaling businesses through to larger entities like emerging corporates, multinationals, non-profits, academia and government. A well-structured advisory board with best practice principles allows people in the organisation to test their strategic thinking and access expertise or connections that may not be readily available via other means.

Advisory boards can go by many different names and can depend on their purpose, scope or even country.  Some examples of other terms used for advisory boards include…

Think Tank | Steering Committees | Project Board | Board of Advice | Business Advisory Panel

Board of Advisors | Advisory Team | Reference Group | Advisory Committee | Professional Advisory Group

Peer Advisory Board | Planning Board | Consultative Body

Advisory Boards are inherently flexible- they can be shaped and used to fit any size organisation and operating environment.  With so many use cases, effective advisory boards require careful planning and well considered implementation.

The Purpose of an Advisory Board

Generally speaking, the purpose of an advisory board is to help an organisation gain new insights and advice to solve business problems or explore new opportunities by stimulating robust, high-quality discussions with qualified, fit-for-purpose advisors.

An advisory board may be established for a specific purpose at the discretion of an organisation, or it may be part of the wider governance system with its purpose defined by statutory or regulatory requirements.

In most applications, the role of an advisory board is not to make decisions, but rather to provide current knowledge, critical thinking, feedback and analysis to increase the confidence of the decision-makers who represent the company. An advisory board is an important part of the overall governance system but it is different to a governance board or board of directors.

Due to the flexible nature of advisory boards, the scope, or ‘terms of reference’, and advisor roles are chosen to fit the organisational requirements. The specific roles, responsibilities and expectations are normally established within the advisory board Charter, alongside protocols within the advisory board structure.

Roles & Responsibilities

There are typically three key roles within an advisory board structure: a Chair, external advisors, and either internal directors, stakeholders, or organisational representatives.

For scaling businesses and emerging corporates, the most common structure is one independent Chair, two external advisors and two internal business representatives (generally the business owner, director and/or CEO). This structure provides a balance of facilitation, external advice and follow-through for implementation.

An example of an advisory board structure:

For more information on advisory board structures, check out our latest State of the Market report.

Larger organisations or corporates may have additional advisory board members. Careful consideration should be given to the overall size and scope of the advisory board to support focus, efficient operation and impact measurement.

Advisory Board Chairs

Best practice for advisory boards is to appoint an independent Chair. The role of the Chair is to establish and facilitate a formal advisory board structure to support effective advisory board outcomes. This may include:

• Establishment of new advisory board structures
• Evaluation of existing advisory board structures for effectiveness and best practice
• Facilitation of advisory board planning and meetings
• Contribution to advisory board outcomes through value-driven insights and advice
• Mentoring to the business owner or executive

ADVISORY BOARD MEMBERS

Members of the advisory board are appointed by the organisation where their skills, experience or contributions align to the advisory boards scope and intended impact.  Members of the advisory board may be:

• internal representatives; for example departmental representatives, executives or internal stakeholders
• external members; for example subject matter experts, stakeholder representatives, investors/funders and/or experienced professionals.

Depending on the advisory board’s formation membership may be limited to internal representatives, external members or a combination of both parties.

Ideally members are appointed for their knowledge and direct experience to problem solve, explore options/concepts and strategic direction. Advisory board participants who are ‘fit-for-purpose’ will be able to actively contribute to the goals and desired outcomes defined in the charter. This may include:

• Contribution to advisory board outcomes through value-driven insights and advice
• Strategic introductions and advocacy within approved guidelines for the organisation

Internal SPONSOR & SECRETARIAT

The Internal advisory board sponsor has the ultimate responsibility to establish (or disband) an advisory board, make the business decisions and follow through on their commitments or implementation plans within the scope of the organisations governance system.

The secretariat function is responsible for the internal management of the advisory board protocols and scheduling.  Internal directors, sponsors and secretariats are directly linked within the organisation and are often founders, directors, CEOs, government ministers, lead investors and other senior executives.

EVERYTHING EVOLVES, EVEN ADVISORY BOARDS

While the advisory board space has started to gain more traction within the past few years, it is already undergoing changes. Specifically, we are seeing new roles appear such as:

• Advisory board manager
• Chair to the advisory board
• Advisor to the board

Need More Information?

Whether you are an organisation seeking to establish an advisory board or an advisory board participant looking for best practice guidance, we’re here to help!

Leveraging over 15 years of research and industry consultation, the Advisory Board Centre developed the global first ABF101 Advisory Board Best Practice Framework™. The ABF101 Framework sets out the core principles which are pillars to support organisations of any size to benefit from their advisory board.

For Organisations

As the global professional body for the advisory sector, the Advisory Board Centre is the lead educator and connector for organisations seeking independent advisory board information and engagement. Our value drivers for organisations are to provide a practical way to increase competitiveness, foster innovation and drive economic impact through effective engagement with advisors.

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For Chairs & Advisors

The Advisory Board Centre provides professional membership, credentials, market intelligence, advocacy and global connections to professionals who are currently engaged or aspiring to participate in formal advisory boards.

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