Project-based advisory board: an economical, timely and strategic tool.
It is becoming increasingly common for boards and management teams to recognise that their span of control, their priorities and their statutory obligations do not allow them to explore opportunities or to consider threats to the business.
The same boards recognise that their project is not something for consulting Goldman Sachs but rather a project that can be cost-effectively undertaken by an advisory board and, for some companies, perhaps they will supply a committee secretary and a financial model.
Many of these things are -for the company- burning projects which need to be undertaken by skilled hands but are not something that the board or existing management has time for.
Recently Penny Ellenger of the Advisory Board Centre has published an article on “How Project Based Advisory Board Support Organisations”
Ellenger cites a number of examples were advisory board have been appointed. Of the examples cited we have been involved in four:
- international investment – investing into a new country
- investment ready – ensuring that the company itself is ready to receive new investment funds
- developing a new business model
- arranging, reviewing and analysing new market testing data.
The real issue is, why do boards and senior management teams appoint advisory board?
- they are economical
- they are smart tool to get good people to look at an issue and report back in assisting manner
- they give targeted, strategic and timely advice all.
It is preferable that advisory boards receive a specific mandate. Whilst they can be chaired by a board member or C suite executive, it is probably best that they are chaired by an independent person who is responsible for completing the report.
This business model has been used by a number of associations who are able to call on their members to give their time voluntarily and they often provide a coordinator or secretary to keep the minutes.
In that version of the model, it is important that the committee has an independent chairman and that the chairman ensures the advisory board does not just receive reports from the secretariat, but rather provides its own draft and the members truly contribute outside the meeting of the advisory board.
In my experience the secretariat can provide information about the company and special issues as required, but it is important to remember the board has outsourced the work and the conclusion to the Advisory Board.
An advisory board allows for passionate informed people to provide their expertise in a considered manner. This advice can be ongoing for say the life of a project and the life of the committee ends with the project.
The beauty of advisory boards is they can be made fit-for-purpose and the purpose is generally more than a consulting assignment for an individual or firm.
They are generally engagements of more than a year to assist a company to get through a process – opening into a new market, developing a new product, changing the organisation to bring in new capital, moving into a new business… All things an already stretched board and C suite management team are not resourced for these days.
Paul Raftery, CEO, Projects RH – September 10, 2020
