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Advisory Boards - Australian Institute of Company Directors Adelaide event
Advisory Boards - Australian Institute of Company Directors Adelaide event
Advisory Boards - Australian Institute of Company Directors Adelaide event
Advisory Boards - Australian Institute of Company Directors Adelaide event
Advisory Boards - Australian Institute of Company Directors Adelaide event
Advisory Boards - Australian Institute of Company Directors Adelaide event
Advisory Boards - Australian Institute of Company Directors Adelaide event
Advisory Boards - Australian Institute of Company Directors Adelaide event
Advisory Boards - Australian Institute of Company Directors Adelaide event
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Advisory Boards - Australian Institute of Company Directors Adelaide event

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13 June 12 - role, purpose and extracting value from advisory boards.

13 June 12 - role, purpose and extracting value from advisory boards.

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  • 1. Advisory BoardsRole, Purpose and Extracting value© Grant Thornton International. All rights reserved.
  • 2. Advisory Boards / Panels 101 1. Lets call them Panels 2. Not a Board-on-the-cheap 3. No decisions. No directives. 4. Usually purpose built with specific scope and remit 5. Usually more about performance or execution than about governance 6. And did we mention… no decisions, no directives© Grant Thornton International. All rights reserved.
  • 3. Setting up an Advisory Board – identifying the need and the reasons behind the decision? Some of the reasons organisations have created Advisory panels include: • Gain access to experienced people who have already undertaken the type of things on which the business is embarking • Reduce the learning cost and ‘curve’ • Bring external rigour to business management • Bring specialty skills to augment the existing management team • Bring networks and contacts • Provide extra-operational oversight to important strategic projects and initiatives • Provide for the discussion of concepts beyond the skills of management • Enhanced reputation and credibility of the business or project to the market • Be a good trial for businesses considering main Board appointments© Grant Thornton International. All rights reserved.
  • 4. Setting up an advisory board – When is the best time to do it?© Grant Thornton International. All rights reserved.
  • 5. What is the role of an Advisory Board – to support growth, to evolve the business, to build capital value? Advisory boards can be engaged to assist in ways such as: • Develop networks within your industry to help grow your business (both domestically and internationally) • Establish new contacts with time-and-place advisors • Focus on new initiatives or specific projects • Provide advice, guidance and support on new/underperforming operational matters • Creating a new product or moving into a new market • Guidance during a restructure or transition from private to public company • Help drive strategy formulation and execution© Grant Thornton International. All rights reserved.
  • 6. What factors make an advisory board effective? – not very different from a Board 1. Clear mandate and Charter 2. Matter centric 3. Right mix of people 4. Well supported, administered and informed 5. Well chaired, purposeful meetings 6. Advice is cross checked 7. Refreshed© Grant Thornton International. All rights reserved.
  • 7. The debate between Advisors and Directors • There is no debate • They do different things • For newer / smaller businesses, an advisory board can start to bring external thinking, advice and networks from a number of different people in a forum which can accelerate your development • For more mature businesses, advisory boards can give experienced detailed advice to the main Board or management, reduce execution risk and short circuit execution timelines© Grant Thornton International. All rights reserved.
  • 8. What are the duties, responsibilities and obligations of an Advisory Board member? • Technically advisory panel members do not owe legal or fiduciary duties to the company in the same manner in which Directors do. They are essential consultants, engaged by the company and governed by their professional codes of conduct, and insurances. • The responsibilities of a panel need to be clearly stated and differentiated from that of the Board of Directors and the processes they engage must be strictly adhered to so as to avoid any accusations of the advisory board acting as shadow or de facto directors. • Thus a formal mandate and charter specifying responsibilities, scope and process for the manner and content of advice given by the panel, is highly recommended.© Grant Thornton International. All rights reserved.
  • 9. What to do next and where to find help: Some businesses may know or have access to appropriately skilled and experienced advisers and can leverage existing skills to set up their advisory panel. A business can benefit from using an external advisor to: 1. Construct the framework for an effective panel including • Panel mandate & Charter • Information flows • Administration / Secretarial 2. Identify and screen candidates and manage the engagement process including: • Network sourcing or advertising • Terms of engagement • Commercial arrangements / Benchmarking of remuneration • Letter of invitation and engagement • Guidance on induction material© Grant Thornton International. All rights reserved.

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