The composition of a well-rounded Board of Advisors
Whether you already have a Board of Advisors (a board that does not have director-level or fiduciary responsibilities) or have yet to establish one, the effectiveness of this group is often dependent on what skills each Board member brings to the “table.”
The best advisory boards we have seen are typically made up of four to seven people, with each person possessing a specific set of skills. In no particular order, it is good to have a “been there done that” person on the team. This is the individual who has already been through what your organization is looking to achieve. For instance, if your business is currently $20M in annual sales and you are planning to go to $50M, this person has already successfully built a $50M company (or more) and knows how to help you avoid a good number of the pitfalls you will likely encounter along the way. It is also very helpful to have a “connections” individual. This person knows “everyone.” She/he can provide introductions (or knows someone who can) to key people who might well be out of your “reach.” Also consider including a technical expert in a specific area that your company could need assistance. For example, if you are contemplating an acquisition but have never done one, then it makes sense to have a person on the Board who knows acquisitions backwards and forwards – not a consultant – someone who has actually been at the pointy end of the stick multiple times. And last, while it is an emerging trend, a good number of companies are now putting a person on the board who is an expert in the psychology of people. People issues are so costly these days that having a person on the board who seriously understands the people equation can be very helpful. Now, this is not your average HR practitioner (no disrespect meant). You need an industrial psychologist or someone who has very solid credentials in this arena.
