FAQ

• 1. What Is An Advisory Board?
• 2. Why an advisory board?
• 3. What are the benefits of having an advisory board?
• 4. Who sits on advisory boards?
• 5. Should advisory board members be paid?

• 1. What Is An Advisory Board?

  Advisory boards are a group of individuals that effectively supplement the statutory board’s skills and abilities to help guide the organization toward its stated mission.
  They are not substitutes for statutory boards of directors and do not have authority over the governance of an organization. The selection and oversight of management, monitoring of performance, approval of strategy and assessment of risks are all subjects properly reserved for the mainboard.
  The primary role of an advisory board is to provide the board with key information and to make recommendations to them on certain matters. An advisory board can support the board by providing expert insight or contacts, but it must be clear where ultimate decision-making authority and collective responsibility lie.

• 2. Why an advisory board?

  Advisory boards may be created to supplement the statutory board’s knowledge on any issue deemed important to the company’s future and provide access to leading experts on those issues. These include disruptive new technologies in the company’s industry, such as blockchain and fintech in financial services, the Internet of Things in industrial, driverless cars in automotive, or wearable monitoring devices in healthcare.
  Advisory boards can also provide fresh perspectives on strategy, economic trends, or specific geographic markets and regulatory regimes, and they can alert statutory boards to issues that may not be on their radar.

• 3. What are the benefits of having an advisory board?

  Having an effective advisory board can bring benefits to an organization including:
  drawing on the experience, skills, and knowledge of people who have practical experience in the business or strategies of like industry organizations;
  enhance the organization’s reputation and credibility in the marketplace;
  increase consumer and investor confidence;
  gain the benefits of an advisory board’s inputs without the complications and risks of the advisory board members becoming members of the mainboard.

• 4. Who sits on advisory boards?

  Typical members of advisory boards may include:
  legal adviser;
  accountant;
  marketing expert;
  HR expert;
  financial adviser;
  entrepreneur;
  industry expert;
  technical expert;
  social or industry sector representatives, for example, consumer advocate, union representative, employer representative;
  semi-retired business people who have a depth of relevant industry experience.

• 5. Should advisory board members be paid?

  This is a matter for each organisation to decide for themselves in negotiation with the proposed advisory board member(s). Some organisations may reimburse advisory board members for out of pocket expenses; others may pay per meeting attended; others may pay a retainer.
  Advisory board members may benefit in non-financial ways from their involvement. They may become exposed to new ideas, expand their networks, use their skills and knowledge in new ways without the burden of fiduciary duties and possibly enhance their credibility if associated with other people of influence and business/community standing on an advisory board.