What are Advisory Boards Roles & Responsibilities? (2024)

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Fundamentals
What are Advisory Boards Roles & Responsibilities?

Fundamentals

Published 14 January 2023

What is an Advisory Board?

An advisory board is a structured, collaborative method for organisations to engage with advice. Advisory boards act as a sounding board for either the organisations’s owners, executives, directors or shareholders.

Advisory boards are useful from scaling businesses through to larger entities like emerging corporates, multinationals, non-profits, academia and government. A well-structured advisory board with best practice principles allows people in the organization to test their strategic thinking and access expertise or connections that may not be readily available via other means.

The Purpose of an Advisory Board

The purpose of most advisory boards is to help an organisation gain new insights and advice to solve business problems or explore new opportunities by stimulating robust, high-quality conversations.

In most applications, the role of an advisory board is not to make decisions, but rather to provide current knowledge, critical thinking, feedback and analysis to increase the confidence of the decision-makers who represent the company. An advisory board is an important part of the overall governance system but it is different to a governance board or board of directors.

Due to the flexible nature of advisory boards, the scope, or ‘terms of reference’, and advisor roles are chosen to fit the organisational requirements. The specific roles, responsibilities and expectations are normally established within the advisory board Charter, alongside protocols within the advisory board structure.

Roles & Responsibilities

There are typically three key roles within an advisory board structure: a Chair, external advisors, and either internal directors, stakeholders, or organisational representatives.

For scaling businesses and emerging corporates, the most common structure is one independent Chair, two external advisors and two internal business representatives (generally the business owner, director and/or CEO). This structure provides a balance of facilitation, external advice and follow-through for implementation.

An example of an advisory board structure:

Advisory Board Chairs

Best practice for advisory boards is to appoint an independent Chair. The role of the Chair is to establish and facilitate a formal advisory board structure to support effective advisory board outcomes. This may include:

Establishment of new advisory board structures
Evaluation of existing advisory board structures for effectiveness and best practice
Facilitation of advisory board planning and meetings
Contribution to advisory board outcomes through value-driven insights and advice
Mentoring to the business owner or executive

ADVISORY BOARD MEMBERS

Members of the advisory board are appointed by the organisation where their skills, experience or contributions align to the advisory boards scope and intended impact. Members of the advisory board may be:

internal representatives; for example departmental representatives, executives or internal stakeholders
external members; for example subject matter experts, stakeholder representatives, investors/funders and/or experienced professionals.

Depending on the advisory board’s formation membership may be limited to internal representatives, external members or a combination of both parties.

Ideally members are appointed for their knowledge and direct experience to problem solve, explore options/concepts and strategic direction. Advisory board participants who are ‘fit-for-purpose’ will be able to actively contribute to the goals and desired outcomes defined in the charter. This may include:

Contribution to advisory board outcomes through value-driven insights and advice
Strategic introductions and advocacy within approved guidelines for the organisation

Internal SPONSOR & SECRETARIAT

The Internal advisory board sponsor has the ultimate responsibility to establish (or disband) an advisory board, make the business decisions and follow through on their commitments or implementation plans within the scope of the organisations governance system. The secretariat function is responsible for the internal management of the advisory board protocols and scheduling. Internal directors, sponsors and secretariats are directly linked within the organisation and are often founders, directors, CEOs, government ministers, lead investors and other senior executives.

EVERYTHING EVOLVES, EVEN ADVISORY BOARDS

While the advisory board space has started to gain more traction within the past few years, it is already undergoing changes. Specifically, we are seeing new roles appear such as:

Advisory board manager
Chair to the advisory board
Advisor to the board

Against the changing market, following our best practice framework, the ABF101 Advisory Board Best Practice Framework™, will provide a guideline for maximising the capabilities of a principles-led advisory board.

Need More Information?

Whether you are an organisation seeking to establish an advisory board or an advisory board participant looking for best practice guidance, we’re here to help!

Leveraging over 15 years of research and industry consultation, the Advisory Board Centre developed the global first ABF101 Advisory Board Best Practice Framework™. The ABF101 Framework sets out the core principles which are pillars to support organisations of any size to benefit from their advisory board.

For Organisations

As the global professional body for the advisory sector, the Advisory Board Centre is the lead educator and connector for organisations seeking independent advisory board information and engagement. Our value drivers for organisations are to provide a practical way to increase competitiveness, foster innovation and drive economic impact through effective engagement with advisors.

CONNECT WITH OUR ADVISORY+ TEAM

For Chairs & Advisors

The Advisory Board Centre provides professional membership, credentials, market intelligence, advocacy and global connections to professionals who are currently engaged or aspiring to participate in formal advisory boards.

EXPLORE PROFESSIONAL DEVELOPMENT

FAQs

What are Advisory Boards Roles & Responsibilities? ›

There are typically three key roles within an advisory board structure: a Chair, external advisors, and either internal directors, stakeholders, or organisational representatives.

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What are the roles on an advisory board? ›

There are typically three key roles within an advisory board structure: a Chair, external advisors, and either internal directors, stakeholders, or organisational representatives.

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What are the roles and responsibilities of a community advisory board? ›

A CAB can be both autonomous and an integral part of any project team, providing an essential link between team members who are external stakeholders and members of the community. The CAB ensures local priorities and concerns are reflected— and, ideally, prioritized—in the project's goals, processes, and activities.

What is advisory responsibilities? ›

Advisor responsibilities include: Get involved! Be well informed of all plans and activities of the group. Regularly attend meetings and frequently consult with the officers. Provide direct assistance in the planning of the overall programs and indirect help in preparing for events.

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What are the roles and responsibilities of the various advisory groups? ›

Advisory Group's members have specific skills and abilities related to that particular group. The role of each Advisory Group is to provide advice to the applicable Management Team member(s) on specific areas that are included in the Terms of Reference to further the knowledge and direction of the organization.

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What is the advisory board responsible for? ›

Advisory boards provide wise counsel regarding myriad issues that your organization may be facing. An advisory board's essential operation is to support the organization's goals. The advisory board provides insight, but it's up to the organization and board of directors to decide whether or not to act upon it.

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What are the obligations of an advisory board? ›

Generally, its members owe no fiduciary duties to the organisation or its members or shareholders. Roles for advisory boards will vary between organisations but generally they will relate to providing objective advice, insights or recommendations. They have no authority to act on behalf of the organisation.

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What makes a good advisory board member? ›

Solid track record of high integrity and strong character.

This is the single most important character trait of any board member. You'll be sharing highly confidential information about all aspects of your company. Public disclosure of your shared information could have potentially disastrous effects.

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What is the role of the advisory board in a nonprofit organization? ›

Advisory boards are voluntary boards formed to advise and help a nonprofit's board of directors. The members of an advisory board can supplement knowledge and expertise to offer more specific help in managing different aspects of the organization.

What is an advisor's role? ›

An advisor accepts responsibility for keeping informed about activities of the organization and for advising officers of the organization on the appropriateness and general merits of policies and activities.

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How many members should an advisory board have? ›

The efficiency of the advisory board will be influenced by its size. If you appoint enough advisors to constitute an advisory board, we generally recommend that it not exceed five to eight members.

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What is an example of an advisory board? ›

An advisory board can help. For example, if a company seeking capital assembles a board to complete the round of financing, the advisors would be tasked with identifying sources of capital and guiding management through the fundraising process. The project would be measurable and specific.

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How to manage an advisory board? ›

You can stay organized by keeping written records of information from advisory board members, maintaining a regular schedule for advisory board meetings and facilitating frequent communication between board members and the managers they work with.

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What is the structure of an advisory board? ›

In a sense, you can think of this document as a less formal set of bylaws. Typically, the purpose of an advisory board is to regularly review past performance, study strategic direction and provide unbiased advice and insights based on knowledge and expertise. Most advisory boards have three to five members.

Who should be on my advisory board? ›

There is no one size fits all approach to finding members for an advisory board, but we recommend seeking potential members who have the following attributes: independent thought, culture fit, value congruence, wisdom, technical expertise and courage. The efficiency of the advisory board will be influenced by its size.

What is the difference between an executive board and an advisory board? ›

Advisory boards and committees are two types of boards that can help a company's management team. The difference between an advisory board and a board of directors is that the former is usually made up of non-executive members while the latter is composed of executive board members.

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Do advisory board members get paid? ›

In nearly all cases, nonprofit advisory board members serve without direct compensation. By contrast, advisory board members of corporations may get paid between a third or half of what regular board members get paid. Corporate board directors may receive compensation in the form of equity interest in the company.