An advisory board is a group of people chosen to give expert and unbiased advice to a business. Members are not typically compensated.
Advisory boards operate informally. They provide insight and guidance tailored to the specific needs of a business and serve as a sounding board for company leaders, helping validate their strategies and ideas.
One of the main benefits of an advisory board is that it provides perspective and observations about strategic gaps and opportunities, with no self-interest on the part of the members.
An effective advisory board has members with a mix of expertise and experience in areas such as law, accounting, marketing, human resources and financial management. It ideally includes one or two successful entrepreneurs from outside industries.
More about advisory boards
The invitation to serve on an advisory board is a sign of respect and admiration. Companies must be careful to clearly define the commitment and their expectations when asking individuals to become advisors, especially as positions on these boards are usually unpaid. Advisory board members do benefit, however, from exposure to each other’s ideas and perspectives and from networking opportunities.