Potential benefits of creating an advisory board for your family business.
The challenges, opportunities and risks for all business enterprises are great. Things get more interesting when you throw in the dynamics of family relationships. Success for the family business depends upon robust planning and sound decision-making. One way to help your family business remain vital is through the use of an advisory board.
An advisory board is different from a board of directors. The board of directors operates in accordance with the by-laws of the organization and the statutes of its jurisdiction. For many family businesses, the board of directors functions in a formal and mechanical manner and adds little value. An advisory board can operate however it chooses because it is a flexible and nimble group of individuals. The power of the advisory board is that it can be focused on the few critical issues that will allow the family business to flourish. These issues may include leadership succession, growth, product and service offerings and compensation programs.
The benefits of a family business advisory board are many:
- Diverse views from an outside perspective
- Depth and breadth of new ideas
- Intentional and focused business planning
- Proper consideration of emotions
- Development of family members’ leadership skills
- Thorough discussion of the tough issues
The best advisory board members are not part of your inner circle of advisors. They are people who have the desire, time and commitment to help. They understand that they will learn much from the experience. They are people who have business acumen. They are good thinkers. They are people who have knowledge and experience in the areas where you need help. They are fun people.
Is your family business ready for an advisory board? Talk with your colleagues or advisors who have experience with advisory boards. Learn what works and get started now.