Agency Governance Part 3: Advisory Boards.

Part 3 of a short series on agency governance. Part 1 — Peer Boards and Part 2 — Advisors are available if you missed them.

Advisory Boards

Advisory boards are the most structured version of this model (short of a formal board of directors), but they're not automatically the "best".

For the right agency, though, they're incredibly powerful.

It mirrors some of the structure from a tried-and-true formal board, without the impact on control, statutory responsibilities and structures etc. You can also choose to make it as formal/informal as you want, with terms of reference dictated by you.

At their simplest then, an advisory board is a small group of carefully selected people who meet with you on a regular cadence to challenge decisions, reduce blind spots, and identify opportunities.

They're not staff. They're not mates. They're people whose expertise and perspective you actively want influencing how you run the business.

Why they work

• You get multiple perspectives you trust.
• You can deliberately bring in experience where you're weakest (try completing a skills matrix for you and your leadership team, and compare it to what you need to execute your business strategy).
• Higher-risk decisions are better thought through.
• Founder isolation reduces as complexity increases.
• You introduce governance discipline without giving up control.

They tend to work best when:

• You're thoughtful about who's in the room and why.

Watch-outs

• Choosing "names" instead of people who will have a genuine (and informed) perspective on your business.
• Getting into the weeds on specific operational matters - you/your team should be able to handle that, so stick to the big picture with your board.
• No agenda or prep turns meetings into vague conversations very quickly.
• If you're not open to being challenged or told you're wrong, it's a waste of time.
• Can suffer from the same problems as NFP boards (issues with attendance/prep/accountability)

My thoughts

I've seen this model work from multiple angles. I sit on the board at Kidsafe NSW and on an advisory board for leading agency Aruga. When it's set up well, the positive impact is obvious.

The member prep/accountability issue can't be understated though. It absolutely plagues NFP boards. At least with NFP boards there's some level of legal liability, but that doesn't really exist in an advisory board (mostly). Paying people does help resolve this though, because it's no longer a favour from them - it's an obligation they've agreed to. How much you'll have to pay depends on who you want to work with.

(Some quick math - a board of 3 advisors, meeting 4 times per year, at $1,500-$3,000 p/person p/meeting - we're at $18,000-$36,000 pa).

I like this model. It takes more time and effort to do well, but if you're committed to it it's worthwhile. Probably doesn't make a huge amount of sense for the smaller agencies due to the cost involved but it's definitely case-by-case.

My Final (Blunt) Thoughts:

I like peer groups for the social and networking aspect, but they're mostly crap for accountability. Plus the quality of conversation is limited by who is in the room, and you have no control over that. You can try and take the guess work out of that by heavily vetting and personally facilitating the meetings, but as an agency founder you're still placing your trust in someone else who (let's be honest) has a vested interest in just filling the room.

Advisors (or….. coaches) can be great if you find the right one. I'm not saying I am the right one for everyone, because I'm not. But aligning yourself with someone who tries to change your business to suit their business is a risky play at best. Try and chat to current/previous clients of theirs and really quiz their personal experience. Do what you'd recommend a prospect do when they're comparing you v a competitor. This model makes the most sense when you want someone to regularly bounce off/consult with who ends up intimately knowing your business.

Advisory Boards are a bigger commitment and IMO make the most sense for a more mature organisation. You can select people based on your own weaknesses and where you want to take your business. The time/effort/investment required by you will probably be greater than the other options, but it most closely mimics the gold standard for governance - a board of directors.