Family business Advisory Board consists of individuals who are not affiliated with the family business, but who have extensive business experience. Utilizing an Advisory Board can be invaluable for a family because it promotes governance within the business.
An Advisory Board works collaboratively with the owners of a family business, as well as with third parties:
- To consider possibilities for the future of the business
- To formulate business strategy suggestions
- To provide direction and to give advice on how to handle difficult situations that often arise within a family business.
Because an Advisory Board typically consists of non-employees, its members often have outside knowledge and understanding of situations that may not have been experienced by the family business. Therefore, the board can provide advice based on first-hand knowledge and previous experience. The board creates an environment where owners, in conjunction with third parties, can examine possibilities, suggestions and directions that they might not otherwise considered. Advisory Boards can add real value, especially when dealing with succession!
An Advisory Board brings in invaluable Outside Experience
An Advisory Board consisting of outside experts; as it provides the family business with guidance on important business decisions. They bring a fresh perspective to the table and encourage business leaders to deliberate and discuss ideas that might not otherwise have been considered. They act as a sounding board for the owners and serves an important purpose that ultimately can create a stronger and more profitable business.
What information is provided to an Advisory Board?
A business must provide ample information to an Advisory Board so that they are well informed and can offer sound recommendations and advice based on facts and data. An Advisory Board should have access to the following data :
- Financial Statements
- Terms of Loan Covenants
- Shareholder Agreements for transmission and transfers
- Special arrangements or contracts with the Family members
- Existing Strategic Plans
- Other information that will allow the Advisory Board to provide sound advice
Does Your Family Business Need an Advisory Board?
Diversity of experience can help and bring in fresh new ideas for the family business to grow and succeed. Very often, a family business retains the same employees year after year, and decade after decade. The business becomes trapped in an insular and static environment. This builds up a very high risk of becoming an irrelevant player in the marketplace. You can utilize an Advisory Board to minimize this risk, as they will often bring to the table fresh perspectives, varied professional experience, and outside-of-the-box ideas. The function of an Advisory Board is not to tell the business what to do. Rather, the Advisory Board is there to benefit the business by giving the business a neutral unbiased review of current business operations and pose questions that insiders will not ask. This is necessary for a family business to open up for new ideas and to push the family business to the next level.
The Advisory Board also works as a sounding board for the owners to validate their future ideas and strategies for the family business.
Does Your Family Business Need Help?
With extensive hands on experience of assisting family businesses, we understand the wide variety of challenges that families face as they work together to build, grow and sustain a thriving family business generation after generation. Through orientation programs, one to one as well as common meetings, workshops, public talks, mentoring, coaching, Family retreats and private family business consulting services, we help family business owners chart their way through family business issues of all shapes and sizes.