Board advisors are individuals with specialised expertise who offer tailored guidance to the company’s board of directors. They often work on a contractual basis, providing objective insights to target specific topics and challenges for the board.
Responsibilities
Strategic advice
A board advisor is an expert in a certain subject matter, chosen by the board to inform the decision-making processes. They provide tailored advice on managing strategic issues in specific areas, be it finance, technology, marketing or any other area.
Providing insights on industry trends
Board advisors are hired for their specialist expertise in a particular industry. They analyse market data, customer behaviour and technological advancements to identify emerging trends and assist the board in capitalising on them.
Attending meetings
Attending meetings is integral to the role of a board advisor. They offer their expertise and external insights to guide discussions and enhance meeting productivity. They also provide feedback on the company’s performance and suggest areas for improvement.
Discussion participation
Board advisors review the meeting agenda to understand the key topics to be discussed. They study the meeting materials, including reports and strategic plans, to prepare for discussions.
Mentoring
A board advisor shares their industry knowledge and best practices with newer directors. They provide personalised advice and support to help mentees hone the skills necessary to take on greater responsibilities.
Leadership development
Companies tend to hire board advisors to reinforce their corporate governance practices. This entails equipping company leaders with the necessary expertise and skills to effectively drive the company’s strategic goals.
Expertise required
The following qualities and skills are essential to the role of a board advisor:
Board advisors should have strong communication and interpersonal skills. They must be able to understand board dynamics and communicate their advice clearly and effectively.
It is integral to the role to possess deep industry knowledge and years of experience to inform strategic decisions, provide valuable insights and impart lessons from past challenges.
An advisor must have robust analytical and critical thinking skills to assess market data, identify opportunities and make informed recommendations.
A good level of financial acumen is necessary to assess the potential implications of financial decisions and investment opportunities.
Strong leadership and change management capabilities enable board advisors to effectively inspire leaders and address challenges during the company’s transitional phases.
Advisors must also possess networking and relationship-building skills to create a collaborative environment with current board members.
Difference between a board advisor and a board member
A board member is a director with voting and decision-making rights. A board advisor, while guiding decision-making, does not have the power to make decisions or vote.
Board members have formal governance responsibilities while board advisors offer specialised guidance.
A board member may or may not be a company individual, while advisors are always external experts to ensure objectivity.
While directors have fiduciary duties and legal responsibilities, advisors typically have limited legal liability.
Difference between a board advisor and a non-executive director
Much like a board advisor, a non-executive director is often an external role. However, NEDs do possess voting and decision-making power.
Advisors are not formally part of the board and do not execute the same responsibilities as directors, while non-executive directors are formal members with fiduciary responsibilities.
Advisors are accountable only to the board, while both non-executive and executive directors answer to a wider range of stakeholders, including regulators and investors.
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