advisory group

8/9/2019 Advisory Group

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"Advisory group" redirects here. For the commercial, for-profit, public

enterprise, see Advisory Board Company .

Wikimedia advisory board meeting, Taipei, 2007

An advisory board is a body that provides non-binding strategic advice to

the management of a corporation, organization, or foundation. The informa

nature of an advisory board gives greater f e!ibi ity in structure and

management compared to the "oard of #irectors. $n ike the "oard of

#irectors , the advisory board does not have authority to vote on corporate

matters or bear ega fiduciary responsibi ities. %any ne& or sma

businesses choose to have advisory boards in order to benefit from the

kno& edge of others, &ithout the e!pense or forma ity of the "oard of

#irectors.

Contents

' hide (

• ) *unction

o ).) +o es and +esponsibi ities of Advisory "oard %embers ' (

• 2 +easons of reating an Advisory "oard

• reating and perating Advisory "oard

http://en.wikipedia.org/wiki/Advisory_Board_Companyhttp://en.wikipedia.org/wiki/Board_of_Directorshttp://en.wikipedia.org/wiki/Board_of_Directorshttp://en.wikipedia.org/wiki/Fiduciaryhttp://en.wikipedia.org/wiki/Advisory_boardhttp://en.wikipedia.org/wiki/Advisory_board#Functionhttp://en.wikipedia.org/wiki/Advisory_board#Roles_and_Responsibilities_of_Advisory_Board_Members.5B3.5Dhttp://en.wikipedia.org/wiki/Advisory_board#Roles_and_Responsibilities_of_Advisory_Board_Members.5B3.5Dhttp://en.wikipedia.org/wiki/Advisory_board#Reasons_of_Creating_an_Advisory_Boardhttp://en.wikipedia.org/wiki/Advisory_board#Creating_and_Operating_Advisory_Boardhttp://en.wikipedia.org/wiki/Board_of_Directorshttp://en.wikipedia.org/wiki/Board_of_Directorshttp://en.wikipedia.org/wiki/Fiduciaryhttp://en.wikipedia.org/wiki/Advisory_boardhttp://en.wikipedia.org/wiki/Advisory_board#Functionhttp://en.wikipedia.org/wiki/Advisory_board#Roles_and_Responsibilities_of_Advisory_Board_Members.5B3.5Dhttp://en.wikipedia.org/wiki/Advisory_board#Reasons_of_Creating_an_Advisory_Boardhttp://en.wikipedia.org/wiki/Advisory_board#Creating_and_Operating_Advisory_Boardhttp://en.wikipedia.org/wiki/Advisory_Board_Company


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o .) %andate

o .2 *ocus

o . /ize

o . %eeting rganization and *re1uency

o . Term of %embership

o .3 ompensation

• "enefits and #ra&backs

o .) "enefits of Advisory "oard

o .2 #ra&backs of Advisory "oard

• 4!amp es of Advisory "oards

o .) /cience Advisory "oard

o .2 %edica Advisory "oard

o . Technica Advisory "oard

o . 4ditoria Advisory "oard

o . itizen Advisory "oard

o .3 4nergy Advisory "oard

• 3 /tartup Advisory /ervice

http://en.wikipedia.org/wiki/Advisory_board#Mandatehttp://en.wikipedia.org/wiki/Advisory_board#Focushttp://en.wikipedia.org/wiki/Advisory_board#Sizehttp://en.wikipedia.org/wiki/Advisory_board#Meeting_Organization_and_Frequencyhttp://en.wikipedia.org/wiki/Advisory_board#Term_of_Membershiphttp://en.wikipedia.org/wiki/Advisory_board#Compensationhttp://en.wikipedia.org/wiki/Advisory_board#Benefits_and_Drawbackshttp://en.wikipedia.org/wiki/Advisory_board#Benefits_of_Advisory_Boardhttp://en.wikipedia.org/wiki/Advisory_board#Drawbacks_of_Advisory_Boardhttp://en.wikipedia.org/wiki/Advisory_board#Examples_of_Advisory_Boardshttp://en.wikipedia.org/wiki/Advisory_board#Science_Advisory_Boardhttp://en.wikipedia.org/wiki/Advisory_board#Medical_Advisory_Boardhttp://en.wikipedia.org/wiki/Advisory_board#Technical_Advisory_Boardhttp://en.wikipedia.org/wiki/Advisory_board#Editorial_Advisory_Boardhttp://en.wikipedia.org/wiki/Advisory_board#Citizen_Advisory_Boardhttp://en.wikipedia.org/wiki/Advisory_board#Energy_Advisory_Boardhttp://en.wikipedia.org/wiki/Advisory_board#Startup_Advisory_Servicehttp://en.wikipedia.org/wiki/Advisory_board#Mandatehttp://en.wikipedia.org/wiki/Advisory_board#Focushttp://en.wikipedia.org/wiki/Advisory_board#Sizehttp://en.wikipedia.org/wiki/Advisory_board#Meeting_Organization_and_Frequencyhttp://en.wikipedia.org/wiki/Advisory_board#Term_of_Membershiphttp://en.wikipedia.org/wiki/Advisory_board#Compensationhttp://en.wikipedia.org/wiki/Advisory_board#Benefits_and_Drawbackshttp://en.wikipedia.org/wiki/Advisory_board#Benefits_of_Advisory_Boardhttp://en.wikipedia.org/wiki/Advisory_board#Drawbacks_of_Advisory_Boardhttp://en.wikipedia.org/wiki/Advisory_board#Examples_of_Advisory_Boardshttp://en.wikipedia.org/wiki/Advisory_board#Science_Advisory_Boardhttp://en.wikipedia.org/wiki/Advisory_board#Medical_Advisory_Boardhttp://en.wikipedia.org/wiki/Advisory_board#Technical_Advisory_Boardhttp://en.wikipedia.org/wiki/Advisory_board#Editorial_Advisory_Boardhttp://en.wikipedia.org/wiki/Advisory_board#Citizen_Advisory_Boardhttp://en.wikipedia.org/wiki/Advisory_board#Energy_Advisory_Boardhttp://en.wikipedia.org/wiki/Advisory_board#Startup_Advisory_Service


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• 7 +eferences

• 5 4!terna inks

Function ' edit (

The function of an advisory board is to offer assistance to enterprises &ith

anything from marketing to managing human resources to inf uencing the

direction of regu ators. Advisory boards are composed of accomp ished

e!perts offering innovative advice and dynamic perspectives. ')( %eeting

1uarter y or biannua y, boards can provide strategic direction, guide 1ua ityimprovement, and assess program effectiveness. '2(

4ntrepreneurs, especia y from startup companies or sma business may

not &ant to di ute their contro of their business by estab ishing a board of

directors &ith forma responsibi ities and authorities. Thus, an advisory

board may be a more suitab e so ution to entrepreneurs &ho &ant access

to high-1ua ity advice and net&ork in the industry. Advisory board, as an

e!terna group, cou d a so provide non-biased information and advice to

entrepreneurs.

Roles and Responsibilities of Advisory Board Members ' ( ' edit (

• deve oping an understanding of the business, market and industry trends

• provide 6&ise counse on issues raised by o&ners8directors or

management

http://en.wikipedia.org/wiki/Advisory_board#Referenceshttp://en.wikipedia.org/wiki/Advisory_board#External_linkshttp://en.wikipedia.org/w/index.php?title=Advisory_board&action=edit&section=1http://en.wikipedia.org/wiki/Advisory_board#cite_note-1http://en.wikipedia.org/wiki/Advisory_board#cite_note-2http://en.wikipedia.org/wiki/Advisory_board#cite_note-3http://en.wikipedia.org/w/index.php?title=Advisory_board&action=edit&section=2http://en.wikipedia.org/wiki/Advisory_board#Referenceshttp://en.wikipedia.org/wiki/Advisory_board#External_linkshttp://en.wikipedia.org/w/index.php?title=Advisory_board&action=edit&section=1http://en.wikipedia.org/wiki/Advisory_board#cite_note-1http://en.wikipedia.org/wiki/Advisory_board#cite_note-2http://en.wikipedia.org/wiki/Advisory_board#cite_note-3http://en.wikipedia.org/w/index.php?title=Advisory_board&action=edit&section=2


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• provide unbiased insights and ideas from a third point-of-vie& 9not invo ved

in the operation of the business:

• encourage and support the e!p oration of ne& business ideas

• act as a resource for e!ecutives

• provide socia net&orking p atform for directors and the company

• encourage the deve opment of a governance frame&ork that enab e

sustainab e gro&th of the company

• monitor business performance

• impose cha enges to directors and management that cou d improve the

business

Reasons of Creating an Advisory Board ' edit (

The main reason to create an advisory board is to seek e!pertise outside of

the company. Advisory board members shou d provide the company &ith

kno& edge, understanding and strategic thinking of the industry or

management of the company.

ompanies shou d seek advisory board members &hose 1ua ities

comp ement the e!isting board of directors and not mask gaps inkno& edge or ski in the main board. An advisory board strengthens the

e!isting board, but not interfering &ith authorities of the e!isting board. The

former editor of The 4conomist, a so an advisory board member, once

says, 6They 9advisory boards: are there to give focus to or sometimes

http://en.wikipedia.org/w/index.php?title=Advisory_board&action=edit&section=3http://en.wikipedia.org/w/index.php?title=Advisory_board&action=edit&section=3


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term of membership ensures that the size of the advisory board remains

efficient and manageab e.

Compensation ' edit (

Advisory board members serve an enterprise for a range of reasons, from

persona oya ty to direct compensation. ompensations are important as

they give incentives to advisory board members to commit to the enterprise

and give 1ua ity advice.

*or e!amp e, the director of ?orus Therapeutics ;nc., +eiter, ' ( had

described the compensations of members serving on the ?orus advisory

committee. /ome of the compensations inc ude@

• the interests of science> ?orus engages in research and deve opment

invo ving viru ent cancers, attracting members &ho conduct simi ar research

• prestige, camaraderie and persona net&orking benefits

• persona favour> friends and c ose co eagues of ?orus e!ecutives are

asked to oin the committee

• cash or stock paid back for their advisory board services

Benefits and Drawbacks ' edit (

Benefits of Advisory Board ' edit (

The benefits of having an advisory board over director of board may

inc ude the fo o&ing@

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• !istance Control

%u tinationa companies have oca companies running their business in a

particu ar foreign urisdiction for o&er costs e.g. ta!, price of ra& materia s,

and organizationa benefits. Bo&ever, giving authority to an outside group

of directors in the oca company may increase risks and instabi ity of the

mu tinationa corporation. /ince an advisory board can operate in a

different ocation, &ith different cu tura and business norms, in a different

anguage, mu tinationa companies may choose to have an advisory board

instead of a oca ized board of directors in order to avoid oss of contro .

• "reparation for Board of !irectors

ompanies may choose to have an advisory board before they have a

board of directors. The deve opment of an effective board of director

re1uires a group of individua s &ith good chemistry and has the

combination of appropriate ski s to prope the business. Baving an advisory

board a o&s companies assess the commitments and capabi ities of each

individua s and observe the chemistry bet&een them before appointing

them to a board of directors.

• #ig er efficiency

A arge board of directors may gro& to an unmanageab e size &here

organizationa comp e!ity and communication breakdo&n may occur,eading to ineffective and inefficient function of the board. A sma er

advisory board, &ithout the comp e!ity of authority invo ved in board of

directors, may &ork more effective y compared to a board of directors that

gro&s in size as the corporation gro&s.

http://en.wikipedia.org/wiki/Multinational_corporationhttp://en.wikipedia.org/wiki/Multinational_corporation


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• Formal advice

The comp e!ity and speed of enterprises often make it difficu t to seek

advice on any particu ar topic. 4nterprises may a so find bui ding trust in

any person or group to provide on-going and meaningfu guidance difficu t.

An advisory board can then provide the degree of consistency, ongevity

and background kno& edge as advisory board members provide re iab e

advice on particu ar issues. Advisory board members receive compensation

for committing to their positions. This gives incentives to advisory board

members to provide 1ua ity advice and ensure that a re1uest for assistance

is taken forma y.

• $ess "ressure on %&ecutives

4!ecutives can e!press partia y defined or tentative vie& to an advisory

board since advisory board=s so e purpose is to provide advice. This a o&

them to 6test-drive options before they face the board of directors &hich

demands definitive and assertive business decisions. The board of

directors assesses the 4 and estab ishes his or her compensation.

Whi e an advisory board may induce change in the company for the

benefits of the company, a board of directors inducing change in the

company cou d suggests a ack of confidence in the senior management

team. This imposes great pressure on senior e!ecutives and cou d become

a barrier for senior e!ecutives to e!press their issues and seek advice fromthe board. Thus, an advisory board cou d be a Csafe harbor= for senior

e!ecutives to seek advice and test business options.

• Focused 'nput


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fiduciary duties or iabi ities and therefore cou d inf uence the enterprise by

providing risky advises.

Examples of Advisory Boards ' edit (

Science Advisory Board ' edit (

$nited /tates 4nvironmenta Erotection Agency estab ished /A" in )F75

An e!amp e of a scientific advisory board cou d be the 4EA /cience

Advisory "oard . '3(

4EA /cience Advisory "oard 9/A": is estab ished in )F75. The ongress

directed the $nited /tates 4nvironmenta Erotection Agency to estab ish a

science advisory board that provides scientific advice to the 4EA

Administrator.

/ome of the ro es of the /A" inc ude@

• revie& the 1ua ity and re evance of the scientific and technica information

being used by the 4EA or proposed as the basis for Agency regu ations>

http://en.wikipedia.org/w/index.php?title=Advisory_board&action=edit&section=14http://en.wikipedia.org/w/index.php?title=Advisory_board&action=edit&section=15http://yosemite.epa.gov/sab/sabpeople.nsf/WebCommittees/BOARDhttp://yosemite.epa.gov/sab/sabpeople.nsf/WebCommittees/BOARDhttp://en.wikipedia.org/wiki/Advisory_board#cite_note-6http://en.wikipedia.org/wiki/United_States_Environmental_Protection_Agencyhttp://en.wikipedia.org/w/index.php?title=Advisory_board&action=edit&section=14http://en.wikipedia.org/w/index.php?title=Advisory_board&action=edit&section=15http://yosemite.epa.gov/sab/sabpeople.nsf/WebCommittees/BOARDhttp://yosemite.epa.gov/sab/sabpeople.nsf/WebCommittees/BOARDhttp://en.wikipedia.org/wiki/Advisory_board#cite_note-6http://en.wikipedia.org/wiki/United_States_Environmental_Protection_Agency


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• revie& 4EA research programs and p ans

• provide science advice as re1uested by the 4EA administrator

• advise the agency on broad scientific matters

Medical Advisory Board ' edit (

Bo&ard Bughes %edica ;nstitute at Gane ia *arm +esearch ampus

An e!amp e of a medica advisory board cou d be the %edica Advisory

"oard of Bo&ard Bughes %edica ;nstitute , '7( &hich is composed of

distinguished scientists and eaders of biomedica research institutions.

/ome of the ro es of %A" inc ude@

•

• Eroposa s for ne& research programs, investigator competitions, and

grants programs>

• The scientific achievements and future potentia of current investigators,

inc uding the eva uation of &hether an investigatorHs term of appointment

shou d be rene&ed>

http://en.wikipedia.org/w/index.php?title=Advisory_board&action=edit&section=16http://www.hhmi.org/about/leadership/medical-advisory-boardhttp://www.hhmi.org/about/leadership/medical-advisory-boardhttp://en.wikipedia.org/wiki/Advisory_board#cite_note-7http://en.wikipedia.org/w/index.php?title=Advisory_board&action=edit&section=16http://www.hhmi.org/about/leadership/medical-advisory-boardhttp://www.hhmi.org/about/leadership/medical-advisory-boardhttp://en.wikipedia.org/wiki/Advisory_board#cite_note-7


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). /tautberg /,


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. +ump up, +eiter ". The ro e and va ue of an effective advisory

board. ;vey "usiness Gourna . 200 >@)--)0.

3. +ump up, Kosemite.epa.gov. 4EA /cience Advisory "oard 9/A": R

$/ 4EA ';nternet(. 20) 'cited 2 ctober 20) (. Avai ab e

from@[email protected] e.nsf8Web ommittees8"

A+#

7. +ump up, BB%;.org. %edica Advisory "oard R Bo&ard Bughes

%edica ;nstitute 9BB%;: ';nternet(. 20) 'cited 2 ctober 20) (.

Avai ab e from@ http@88&&&.hhmi.org8about8 eadership8medica -advisory-board

5. +ump up,


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)). +ump up, 4nergy.gov. /ecretary of 4nergy Advisory "oard

';nternet(. 20) 'cited 27 ctober 20) (. Avai ab e

from@[email protected]

)2. +ump up, ;deamensch.com. Why 4very /tartup Deeds An

Advisory "oard ';nternet(. 20)2 'cited 27 ctober 20) (. Avai ab e

from@[email protected]&hy-every-startup-needs-an-advisory-

board8

) . +ump up, #irigogroup.com.au. /tartup "usiness Advisory R

#irigo


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