How To Build A Strong Advisory Board?
Advisory boards are tasked with supporting management on behalf of either the shareholders or the owners of a company. In today’s rapidly changing business environment, an effective advisory board with up-to-date knowledge is more important than ever. In the past, it was more about financials oversight , today more support is needed on strategic and conceptual issues. In this context, productive support and advice on the so-called soft topics such as corporate culture ,sustainability or modern working environments is just as much in demand as the classic areas of digitalization , efficiency, process optimization and financing. So what are the most important success factors for the right staffing of a professional advisory board?
Many traditional advisory boards focus still on the oversight of the management teams and their regular monthly reports. However the best boards go beyond this traditional role-model and take a more active approach in providing constructive challenge on strategy, talents, digitalization, potential M+A, culture and innovation. Increased involvement mean that the members of the board need to have diverse backgrounds and a broader scope, in most cases deriving from own entrepreneurship and multi-industry experience.
Contemporary Advisory Board members need a special independence. Both financially and in terms of content. Former management members or long-standing customer relationships are not necessarily conducive to new thinking. Today’s competitive landscape needs strong characters ,who don’t leave everything as it is under the label of „continuity,“ but who courageously provide input with their own ideas and experience or even help to push through uncomfortable decisions.
Word has spread that digital transformation is a particularly important success factor today. But how many members of the Advisory Board are really strong in these topics? Technology changes, digital processes, speed, new generation talents and, of course, above all, the adaptation of one’s own value creation to digital models. You have to be very tough and honest with the qualifications of the board members and maybe even bring one or the other generation change into play.
Advisory boards are usually involved in the search at the C-level. It is usually a matter of looking for and integrating future lateral thinkers while retaining the own strengths in the company. This is the backbone of any positive company development and it actually always starts with the composition of the advisory board and the management. The board is often the mirror image of what is being implemented in the company – something that can be understood even without major empirical studies. Today, the vitas of board members are often still focused on continuity, stability, solidity, personal relationships and industry experience. The question may be asked whether this is enough in view of far-reaching social change and constantly changing market conditions ?
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