Family Business Advisory Board: Paving the way to future growth and success
When a family business begins to transition from a small to medium size business, the introduction of an advisory board can enhance professionalism and enable progression for future development and growth. An advisory board acts as an effective stepping-stone for a growing family business that is not ready for a formal board. The growth phase of a business from small, to medium, to large; requires greater attention to detail, governance and structure. There is a need for formalised governance, systems and processes, together with external expertise or personnel from outside the family structure.
A well selected advisory board can broaden the company’s network of influence and exposure in the marketplace, thereby enhancing its status. Advisory boards are an integral part of many successful businesses: giving advice to the family business, facilitating access to new business circles and introducing diverse people with different, yet complimentary, skills to the family.
An advisory board will have vision and established expectations, together with quality structure and efficiency guidelines, forming a mandate that will benefit and support the business.
External wisdom, skills and knowledge are brought to the table, with previous learned experience and/or active practical success. It is important to acknowledge that the role of an advisory board is to complement and reinforce the business it supports, but not to make decisions on behalf of the business.
By providing an external and impartial perspective, an advisory board can highlight some of the current and future challenges that are potentially faced by a business in growth and development. This external perspective can avoid the challenges associated with emotional decision-making which can potentially hamper the progression of the business.
This applied depth of knowledge together with the implementation of effective changes can often bring focus to key aspects of the business on numerous levels.
The structure of the human capital within the business: A review of human capital will identify rectifiable gaps or weaknesses, thereby assisting with the establishment of a formidable and progressive company team. Key market-leading personnel will often be attracted to the energy, activity and challenges presented by a business that has a clear growth and development plan.
The financial strategy and budgeting for the business: Identifying the allocation of appropriate funding for growth, such as capital expenditure, marketing or the introduction of key personnel.
The market perception of the business can be enhanced with knowledge of changes, growing confidence, and creditability with all stakeholders.
The positioning of the business in the marketplace can also progress its reputation which is further supported with change, through growth and market activity.
The advisory board will often also establish the foundation for the main board as the business continues to evolve.
The key responsibilities of the advisory board include but not limited to,
Strategic plan development: establishing the plan and key objectives for the business’s future growth.
Review of policy, systems and processes: assurance that the appropriate documentation and governance is detailed and adhered to, through direction, guidance and support.
Effective identification and tactical marketing and public relations strategies.
Banking and funding programming and strategy to effectively underpin the business working capital and capital expenditure.
Other effective key short-term initiatives identified for broader opinion and support.
“The introduction of an advisory board to a family business has significant merit from a real experience perspective, quite often providing some key “aha-moments” in the business. The strength and impartial knowledge that it can introduce to a business is invaluable, such as analysing its entire operation. From management to supply chain, as advisors we examine every part of the business, giving valuable advice that we’ve accumulated throughout our own experience and exposure” says Lea Boyce, BOYCE Family Office.