While Advisory Boards are in an embryonic stage in Australia, awareness is growing with regard to their form and function. Just what is an Advisory Board, and how is this differentiated from the various other corporate boards that are so freely discussed (if not understood) in the business world?
According to Peter Williams, author and founder of the Australian Advisory Board Institute (AABI), the main difference between an Advisory Board and a traditional board (or Board of Directors) is that, with the latter, members are primarily concerned with governance and regulatory issues, whereas an Advisory Board is more concerned with support, challenges and the future value of the organisation than with fiduciary responsibilities and governance.
So, how does an Advisory Board actually help bring about efficient operations, growth and overall success? What does the Board’s input really mean to a senior executive or business owner in the practical sense?
Sam Cawthorn is Founder and CEO of Speakers Institute, as well as an author and speaker. Recently, Sam was interviewed on the topic of Advisory Boards. Previously, he had enlisted an Advisory Board to fill in the gaps of his own knowledge and skill set in the area of running his business.
Simple enough, but there are many business owners who are too proud or self-conscious to admit they even have these gaps.
While there weren’t any “fires” or crises in his company (many business owners engaging Advisory Boards do in fact have such pressing issues), Sam wanted to have the security of feeling that someone “had his back” when he wasn’t sure of how to proceed in a given area or needed feedback on one of his decisions.
“They’re not there to make the decision,” Sam offers. “I make the decision, but at least I know that I’ve done my due diligence, and now I can move forward knowing I’m making a more informed decision.”
There is a give-and-take, since there is value in the Advisory Board members advising Sam and other business leaders like him. Serving the companies with whom the Board members work enhance the members’ résumés and credibility.
“My Advisory Board really does help me get clarity on issues that do come up,” Sam says, “whether it’s finance, staffing, etcetera. The number one thing is that I know they have my back. They help me feel supported, competent and confident in forging ahead with my business decisions.”
Good day, Peter. Sam Cawthorn here. Just replying to your email. I thought it might be easier for me to reply through audio. So I’m just going to go through these nine questions here and just give you the answers as we go along.
So number one, when did you realise an advisory board could help? In most cases, I had a lot of our customers and clients which actually knew a little bit more about the various areas that I didn’t know much at all about. So really I was just asking him for advice in my areas of lesser strengths and they’ll give me this advice. And I thought, look, instead of just doing this one on one, maybe we can do one to many. And so for me it was actually more of a organic process. I didn’t know much at all about advisory boards, but I just simply found a way how I can get all the right people in the room at the right time given me advice and sound solid advice.
Two, what frustration or challenges that advisory board eliminate for you? But really, the help for me is that these guys here have my back, which means that if I’m a little bit uncertain towards a decision or let’s say I’m unsure or I need to collect more data or more people’s opinions. My advisory boards certainly does help me with real clarity really. And also it’s very challenging to do come up such as irate customers or clients or let’s say even, issues with finance staff, taxes, et cetera. My board obviously really helps me to get clarity on these areas of my lesser strengths.
Three, what benefits do you get them having an advisory board? Look, so much, but really the number one thing here is that they have my back. They’re there for me. I can pick up the phone and they’ll answer it. So look, I really do get a lot of benefits from having an advisory board in general.
What concerns or hesitations did you have before deciding to get an advisory board? I actually didn’t have any concerns or any hesitations. My advisory board are purely there as advisors, they’re not there to actually make the decision. I get to make the decision they’re not like a proper board. They just simply give me lots of advice and obviously then I ultimately make the decision. So we didn’t really have any concerns or hesitations. In most cases, my only concern or hesitation that I did have is to make sure that there is a give and take with the advisory board. So my advisor is actually do get value from actually advising me, so what’s in it for them? So that was really my only concern to make sure that they do have my back, that I do have their time and so on and so forth.
Next one, how does having an advisory board make you feel? It makes me feel supported and makes me feel I’m good enough. It makes me feel I belong. And in most cases, they’re the greatest human fear, isn’t it? The fear of not feeling loved, the fear of not being good enough and the fear of not belonging and certainly the advisory board really helps me to know all of that.
What two to three topics would you like to see in a video series on your advisory boards? I really wouldn’t know. Maybe pre and post pre advisory board touch points and how can I communicate more effectively to my advisory boards outside of the meeting. How often do we meet and already just instruction on how to run and ensure that there is a give and take for my advisory boards.
How did you go about setting up the advisory board? How often do they meet? What sort of agenda? Are they paid? My advisors are not paid. They meet every quarter and it’s just simply, a real general generosity that my advisors give me. They believe in me. They believe in the organisation and it works really well.
Anyway, I trust this really helps Peter. Talk to you soon. Bye.