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ROLE OF THE BOARD OF ADVISORS
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        Determining the Focus: Companies sometimes set up Advisors to focus on Technical, Strategic, Financial, and/or Operational issues – in other words from everyday issues to long range planning. Some companies want Advisors to exploit their contacts (marketing), industry experience (reputation), or management expertise (proven executive). Topics at meetings often include: industry trends or technical innovations (Technical); long range plans, expansion, divestiture and succession planning (Strategic); capital needs, sources of capital, acquisitions, budgets, cash flow (Financial); infrastructure changes, employee relations, marketing/sales, human resources, management (Operational); and various other problems. Many Advisory Boards include members covering all categories above. Others have only single purpose Boards (e.g. Technical Advisory Board). The focus is set by the needs of the company.

 

        Selecting Experience Matching Focus: Advisors need practical experience in the focus area the Owner/CEO has selected, but be careful. A young company should not select a former Fortune 500 senior marketing Advisor if that individual knows nothing about marketing for a small business. Do not select a Technical Advisor if that individual advises or represents any competitor (unless you are careful about your proprietary technology). Do select Financial or Operational advisors from non-competing businesses. Do select Advisors who are not afraid to voice their opinions and are willing to argue with you – and listen to their logic and experience.

 

        Developing a Long Term Relationship: Since a wide range of topics may be considered by the Advisors, often including proprietary, confidential, or privileged information, and since the Owner/CEO presumably will listen to the advice, he/she must develop a long term relationship with each trustworthy individual selected. It usually takes a year or more for a Board to have sufficient experience with a company for its performance to be evaluated by the Owner/CEO. A “chemistry” or rapport must be achieved to earn confidence in the opinions offered by each Advisor. This is true between Board members, too.

 

 

 

McNichols & McNichols, Inc. – P.O. Box 2226Middleburg, VA 20117 – (703) 477-7158

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