Board with business? Advisors can help

Janet Arrowood

Would your business benefit from outside advice? Do you sometimes wish you had help making difficult or confusing decisions? Have you considered seeking support from a group of professionals to help with these hard choices?

If you’ve been thinking about outside counsel, your choice has likely come down to a board of advisors or board of directors. The challenge is deciding which option to choose — unless your bylaws or other documents require a board of directors. For most small businesses, a board of advisors makes the most sense.

How do you choose a board of advisors?

First, and perhaps most important, make sure the people you choose are willing to give the time their advisory roles will require. Maybe that time involves a monthly meeting.
But it could involve more depending on your business needs.

Next, make sure these people have the expertise you need. Your board is normally separate from your professional advisors, although some of those advisors also could serve on your board.

How much do prospective board members expect or want to be compensated. Do they expect stock? Cash? Expenses? Free lunches?

Make sure your board members possess these qualities: experience in the areas you want advice, competence in their areas of expertise, enthusiasm for your business success and directness — because you want truthful, useful advice.

Finally, choose an uneven number of board members to avoid ties if you want to vote on something. The number of board members depends on the size and complexity of your company. For small businesses, five to seven is usually plenty.

What should you expect from your board of advisors?

The most important resource your board should bring is honest, unbiased advice for managing, improving and growing your business. Your board should function as a group of mentors, not an entity with decisions over your company officers and key personnel.

Who should you choose for your board of advisors?

There are many possibilities. Perhaps a trusted friend who has relevant business experience. Maybe a family member known for honest, reasoned advice. Or possibly your accountant or benefit, financial, legal or tax advisors might be interested. If you’re active in business and professional organizations, those offer excellent starting points to recruit board members with relevant experience.