Advisory Boards

Why I feel like a Goose

For many years I’ve plied my trade as a Family Business Solutionist – acting as a best practice adviser, mediator, and strategic problem-solver.  Generally, and despite the complexity and unpredictability baked into the sector, we’ve achieved good outcomes.

BUT, when engagements last longer than expected, and morph into something quite different, I sense crossing a line that separates what I was initially engaged to do, from what I’m now being asked to do.

My engagement letters anticipate diversions, though new ones are issued when a brief changes dramatically (eg: from resolving a family conflict to establishing a Family Council).  Nevertheless, there’s a disconnect.  We think we understand where we’re going, but feel less sure.  Our mindsets haven’t synced to the new reality – mutual expectations remain chained to the past engagement.  Effectively, we’re stuck in conventional “Adviser-Land”.

Why does this make me feel like a goose?  For failing, over many years, to fully appreciate that “Advisers ain’t Advisers” – in ways that really matter.  I’ll explain:

Most advisory engagements are designed (and priced) to deliver defined outcomes, by performing specific tasks, using expert skills.

Ongoing engagements tend to be less clearly defined and more open-ended.  They work on long-term retainers, rather than fees-for-service.

Having proved yourself competent and trustworthy on an initial engagement, you now find yourself valued more for your knowledge of the client, and your demonstrated wisdom, experience, and judgement, than for specific knowledge, or skills – even though you’ll have to keep using most of them, often in highly innovative combinations.

You develop a more intimate working relationship with the actual business leader than they’ve enjoyed with most people, for a long time.  You become more mentor than adviser – helping them to grow and modernise the business; change culture: upgrade HR functions; establish independent governance structures and systems; and facilitate succession and leadership transition (to name a few).  You generally lighten the leader’s load – by sharing it, intellectually and emotionally, and to a lesser extent – practically.

My epiphany was realising that I’m no longer acting as an Adviser; I’ve evolved into an Advisory Board, even if it’s a Board of One.  I’m calling it (privately) a “Sounding Board”.  Importantly, this is now a fundamentally different engagement, where I’m required to deliver “Significant Advice”, rather than “Correct Advice (and services)”.

To avoid selling everyone short, underbilling, and feeling like a goose, establish a different  mindset for the engagement – with different expectations, changed relationship dynamics, and more appropriate fee arrangements.  You deserve, and should expect, a substantially greater return on time spent – the nature, style, quality, depth, and value of your services have moved onto a very special, and wholly different, level.

So, what is an Advisory Board?

Advisory Boards

“Advisory Board” describes both a flexible concept and a tangible form of that concept.

Concept:  “significant challenges” should be addressed by “Significant Advice”.

Individuals, families, and businesses face “significant challenges” when:

  1. Issues are complex and,
  2. Actual or potential consequences are profound and,
  3. Solutions are beyond current levels of skill, experience, and/or bandwidth and,
  4. Increasingly, challenges arising are “beyond scope” for traditional advisers.

Form:  Advisory Boards are problem-solving, face-to-face and/or virtual forums, where “significant” challenges are raised, solutions are developed, critical decisions are made, and new ideas and opportunities can be introduced and refined.

Advisory Boards should counsel, advise, guide, and facilitate, rather than undertake work, although their members are often initially engaged for their specific expertise (eg: resolve family conflict, or develop and negotiate acceptance of a succession plan).  They’re then invited to stay on to help leaders deal with a wide range of other challenges.  When members aren’t directly involved in providing advisory services, they’re better able to act objectively, providing strategic oversight.  Given the nature and needs of business families, this isn’t always possible – high levels of trust usually trump desires for objectivity.

Advisory Boards often collaborate with external networks of trustworthy advisers – calling on reliable colleagues to undertake sensitive and specialised tasks (eg: psychological support for troubled family members and complex HR projects).

There are over 600,000 active Advisory Boards operating in 2022.  Most are in the USA.

Significant Advice

Successful individuals, groups, businesses, and organisations come in a wide variety of shapes, sizes, relationship dynamics, and lifecycle stages.  They all have unique needs, which tend to get more complicated with increases in age, size, and success.  When their significant personal, family, and/or business needs aren’t being met by conventional advisers, they need Significant Advice, provided by an Advisory Board.

Significant Advice is generated by broad strategic thinking and proactive enquiry, using information gained through high touch, high trust, proactive relationships.  It generates profound effects, ranging from intensely personal, to highly strategic.

Significant Advice is courageous:  leaders and Boards hear what they need to hear, rather than what they want to hear.  Issues that need to be raised and resolved, are resolved.

Significant Advice has a high care factor.  It “has the backs” of individual, family, and business recipients.  It also makes things “less lonely at the top”.

Types of Advisory Board

  1. Sounding Board (for individuals) – usually a single adviser, acting as mentor, coach, facilitator, and strategic problem-solver. Like a “professional friend in need”.
  2. Family Advisory Board (for families) – one or two advisers work with a Family Council, or Family Board, as mentor, coach, best practice adviser, meeting facilitator, and strategic problem-solver.

The role is part expert governance / business adviser, and part “wise old Uncle Bob / Auntie Grace” – the guy or girl everyone in the family respects and listens to.  Key responsibilities include maintaining focus, thinking, and decision-making on family stuff, when in family-mode, and on business stuff, if/when in business-mode.

  1. Business Advisory Board (for family businesses) – one or two advisers work with a Business Board as mentor, coach, independent governance adviser/appraiser, meeting facilitator, and strategic problem-solver. The role is mainly business-focussed, with an appreciation of what family owners need and expect from their business(es).

This is more like a conventional director’s role, with additional responsibilities for maintaining the focus of family board members on business thinking, and decision-making, rather than on the family issues that should be addressed in a wholly different environment.

 

Types of Boards used by Business Families and Family Businesses

Standard Boards Users Advisers Services Complements
1.   Family Council Family
(Family issues only)
One or two.
  • Family Governance, Plans & Decisions.
  • Enhance Family Capital.
  • Best Practices. Stewardship & Legacy.
  • Family Succession.
Business Board
2.   Family Board Family & Family Business
(Family & Business issues)Assumes same people have dual AND separate roles:(1)  Family(2)  Family Business
One or two.
  • Family Governance, Plans & Decisions.
  • Enhance Family Capital.
  • Best Practices. Stewardship & Legacy.
  • Business Governance, Plans & Decisions.
  • Leadership, Management, Succession.
  • Sustainability.

n/a

(Covers Family & Business needs)

3.   Business Board Family Business
(Business issues only)
One or two.
  • Business Governance, Plans & Decisions.
  • Leadership, Management, Succession.
  • Sustainability.
Family Council

 

Types of Advisory Board used by Individuals, Business Families and Family Businesses

Advisory Boards Users Advisers Services Complements
1.   Sounding Board        (for Individuals) Successful Individuals / Entrepreneurs One.
  • Listen, Empathise, & Support.
  • Coach & Mentor.
  • Strategy, Lifestyle, & Retire / Refire Plans.
  • Problem-Solving & Wise Decisions.
  • Concierge & Undertaker – tasks.

Specialist Advisers.

Business Board.

2.   Advisory Board (for Family & Business) Business Families    (shared business interests and/or investments) One or two.
  • Family Governance, Plans & Decisions.
  • Enhance Family Capital.
  • Best Practices. Stewardship & Legacy.
  • Business Governance, Plans & Decisions.
  • Leadership, Management, Succession.
  • Sustainability.

Specialist Advisers.

Family Council.

Family Board (Family issues).

Business Board (Business issues

3.   Advisory Board (for Business)
May also work with Family

Family Business            (families with operating business(es).

Any other Business.

One or two.
  • Business Governance, Plans & Decisions.
  • Leadership, Management, Succession.
  • Sustainability.

Family Board (Business issues).

Business Board.