Do your business need an Advisory Board?
As we head into the ‘post-Covid normal’ business environment, there are a number of serious issues for businesses to consider including public health compliance as well as new business dynamics and a fragile economic environment. It might be time to consider appointing an Advisory Board.
By Michael Mekhitarian
Times are changing - rapidly
There’s pressure on the small business sector. Not just in terms of pulling the Australian economy out of post-pandemic recession, but doing so in an ever-changing, fast-paced environment.
I’m not just talking about Covid health considerations, although they’re very serious considerations. I’m talking about a fragile economic environment, changing demands from staff and customers, and a need to stay competitive in these highly disrupted times.
Those businesses that want to stay ahead, will need to strengthen their ‘adaptability’ muscles.
Being nimble – able to respond quickly, to deal with change, take advantage of opportunities and to solve problems, will be key to success.
An advisory board can be a powerful tool in helping your business to do just that.
A lot of small businesses steer clear of advisory boards, ‘pooh-poohing’ them because they are another ‘layer’ of administration that the business can do without. This view is not uncommon and it typically it stems from the fact that formal boards of directors have legally defined responsibilities regulated under the Corporations Act or corporate governance codes.
The role of the Advisory Board
But right now, it might be time to reconsider that view.
Advisory boards advise, they don’t have a governance function and make decisions like a formal board. An advisory board can be run with relative informality, and it can be an excellent ‘safe,’ independent, neutral, team to have robust discussions with.
Advisory Boards can assist with determining strategy, and encouraging innovation, and in many cases they can provide real, practical help through their own professional knowledge and networks.
An Advisory Board acts as ‘wise counsel’ in helping to make decisions of significance, and can be very useful in helping to navigate uncharted waters … In times like these, through periods of growth, during significant organisational change.
Setting up an Advisory Board
If you’re considering setting up an Advisory Board, choose good people with good skills and experience that will be beneficial. Perhaps choose people with expertise you don’t have in-house. Keep the group small.
And remember, that Advisory Boards can only be as successful and effective as they are originally set up to be. So make sure you use this platform in ways that are advantageous to the business.
Each company will need to determine the roles and responsibilities of its advisory board to best suit its particular circumstances and needs. The role of the advisory board can, and probably will, evolve over time, but it is useful to document a charter to provide some direction for members and to keep some minutes, or action points to ensure direction and accountability.
At ATB we are passionate about, and believe in, small business. We’re business owners too, so we understand on a very deep level the challenges you are facing.
Our team includes accounting experts, taxation professionals and business mentors. If we can help in any way, please feel free to contact us.
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