We can probably all agree that many businesses often operate with scarce resources and limited expertise, sometimes making it challenging to navigate complex business decisions. However, if a business owner had the opportunity to solve this problem by consulting a team of experts solely dedicated to providing guidance based on previous experiences, wouldn’t they take it? I am sure most business owners would be eager for that type of access. Fortunately, it’s possible. And at National Technical Institute, it’s been a resource that has made us stronger.
NTI’s advisory board meets twice a year and they have become an invaluable asset. We teach HVAC, plumbing and electrical trades, and the board is comprised of contractors and trade-related business owners who assist in planning the curriculum to ensure students acquire the knowledge required by potential employers. NTI’s advisory board members are invested in the success of NTI’s graduates, as they could potentially employ them, given the current shortage of qualified workers. As a result, they are enthusiastic about helping to create an excellent learning experience.
Advisory Board vs. Board of Directors
An advisory board consists of external advisors who provide advice to a company’s management team. They are not necessarily involved in the day-to-day operations of the company and do not have legal or fiduciary responsibilities. It is simply a tool to access expert consultation, usually focused on a specific area of the business, but not involved in the overall management of the company.
A corporation’s board of directors, on the other hand, generally must be elected or appointed by leadership. They have legal and fiduciary responsibilities; are obligated to the company’s shareholders; and responsible for making strategic decisions, setting policies and goals, and overseeing the company’s financial performance.
An Overlooked Wealth of Knowledge
Most business owners overlook creating an advisory board, or do not know that this type of set up can be a benefit and can often be relied upon to offer sound business and financial advice. A team of expert advisors providing high-level strategic planning and direction without being bound by board decisions can be an invaluable tool. And, since an advisor generally does not have the fiduciary and legal responsibility of a director, he or she may offer advice more freely. For this reason, some corporations have an advisory board as well as a formal board of directors.
When forming an advisory board, it is important to be honest and recognize the areas where expert advice could be the most helpful. This is key to supplementing an owner’s knowledge and providing guidance. Once these areas are identified, business owners can pinpoint potential advisory board members possessing the relevant skills and expertise and establish a plan for the board’s operations. It’s helpful to go through personal contacts that include former colleagues and clients as well as trade associations and institutions. Given that some of these individuals are likely to be highly sought-after experts in their respective fields, compensation or equity incentives may be necessary.
Investing the time and effort required to establish a strong advisory board can be invaluable, given the numerous benefits that impartial outsiders can provide.
Access to Expertise: Advisory board members should have years of experience in their respective fields and can offer insights on topics such as marketing, sales, finance and operations. This guidance can assist business owners in making informed decisions, avoiding costly mistakes. A CEO could be perfect here, one who has built and scaled teams, raised capital and made difficult decisions.
Objective Feedback: Having access to an independent sounding board could be invaluable to help refine business strategies and improve operations. Members who come from the same industry are helpful in understanding the target customer.
Networking Opportunities: Advisory board members who are well-connected individuals with extensive networks can provide business owners with valuable networking opportunities that can help grow and expand operations.
Improved Credibility: An association with respected individuals can only boost a business’s reputation and bring a new level of awareness.
Increased Accountability: By regularly reporting to an advisory board, business owners can stay focused on objectives and avoid getting sidetracked by day-to-day distractions.
Strategic Planning: Strategic planning is vital for any business for growth and expansion, and an advisory board can help business owners identify new opportunities and develop strategies.
Diverse Perspectives: Bringing together individuals from different backgrounds and industries helps business owners see things from different angles. A variety of perspectives from people with experience helps business owners gain fresh insights and find opportunities that are, possibly, being overlooked.
Having access to seasoned, knowledgeable experts helps business owners make better decisions, avoid costly mistakes and grow operations.
Rick Jackson is the campus director for National Technical Institute, a state-approved trade school serving students in Phoenix and the surrounding areas. With campuses in Las Vegas, Phoenix and Houston offering fast-track training in HVAC, plumbing and electrical, NTI’s mission is to produce problem-solving, creative-thinking graduates who possess industry-standard knowledge and skills for a long-term, promising career.