Advisory Boards: Do I Really Want Advice?

April 20, 2016

Small and large companies have a wide range of theories regarding advisory boards. An advisory board can be as small as talking with mom and dad at a Friday fish fry, to a more formal board that meets on a regular basis, in a formal office, at regularly scheduled times. I sit on a few advisory boards myself, and find them to be an extremely valuable tool for any company.

In a construction company and small family businesses, there are often family issues that need the assistance of a ‘referee.’ Advisory boards can fill that role and offer a wide range of advice and can be an extremely valuable sounding-board.

My view of an advisory board is to have a four-member board; a senior attorney, a retired accountant, someone in sales — whether the same type of sales as the company or not — and someone who is retired from a similar-type company. This covers four realms of advice. The shareholders also have to respect and be willing to listen to the advisory board. While the advisors don’t vote, they offer advice and bring a wide range of contacts into any meeting.

Oftentimes, the companies say they really can’t afford an advisory board. Advisors of Fortune 500 companies make a considerable amount of money. The advisory boards I am talking about typically range from $500 to $3,000 per meeting. Oftentimes it is followed by a dinner, golf, or some other activity where advisory board members can interact with the shareholders.

For more information about "Advisory Boards: Do I Really Want Advice?," contact Buck V. Sweeney at csweeney@axley.com or 608.283.6743.