Why You’ll Absolutely Love Serving on Advisory Boards



Trusted to serve
by Tamara Paton in Motivation, Work of the board

Many governance pros have their sights set on roles with boards of directors. I understand their laser focus on fiduciary roles, but I don’t share it. When we overlook advisory boards, we miss out on opportunities to make an impact with significantly less risk, all while learning in a big way.

My experiences on both sides of the fiduciary/advisory board line illustrate a stark contrast. On a fiduciary board, I am responsible for overseeing risk, approving capital investments, and awarding the CEO her bonus. Each year, I read thousands of pages of financial statements and policy documents, bribing myself with rewards to wade through the volume.

In contrast, my advisory work focuses on helping a management team soar. Sidestepping reports on money laundering audits or gross fraud losses, I serve as a sounding board for the CEO’s challenges. We brainstorm ways to communicate strategy more effectively. He asks me for feedback on his upcoming presentation to bankers.

In recent years, fiduciary governance has become a quest to catch management in the act. Despite strategy oversight remaining a key board responsibility, the governance community lacks an aligned view of how to fulfill that role. To compensate, we focus on the checklists and scorecards that convey the tangible feel of due diligence. Despite these efforts, personal liability borne by directors is on the rise.

Our quest for exhaustive assurance is only natural. But what if you were free of that responsibility? What if you could invest your energy and knowledge into an organization’s growth without policing your colleagues? If I have piqued your interest, consider the following reasons why you might enjoy contributing as an advisor.

Advisory boards emphasize the important, rather than the urgent

In today’s environment, directors devote increasing time to financial reports, risk tolerance, and internal controls. While these safeguards are necessary, they alone don’t create value for the organization. Free of those obligations, advisory boards focus on markets, customer behaviour, and product innovation. Advisors offer “been there, done that” insight into raising capital, negotiating with vendors, and developing leaders.

Advisory boards build relationships

Seasoned advisor Richard Cantin suggests that “a person joins an advisory board because they’re there to support the cause or they’re there to support the founder”. In the presence of either motivation, this is fertile ground for strong, mutually rewarding relationships. An executive might test ideas before going to her board of directors. A CEO can admit that he is in over his head, without concern for job security.

When a CEO feels that advisors have his back, he can make difficult decisions more objectively. He also can look up in dark times and realize that he is making more progress than the immediate circumstances suggest. In short, the isolation of the C-suite can seem much less lonely.

Advisory boards carry significantly less risk

If a company falls on hard times, the board of directors can be personally responsible for unpaid employee wages and environmental damage. Although an advisor carries some risk related to conflicts of interest and the use of confidential information, the potential liability is relatively mild. In short, I’m not aware of courts forcing advisory boards to make pension fund contributions.

Advisory boards can offer meaningful compensation

Although I would not suggest advisory work as a get-rich-quick scheme, it can be lucrative. There are no hard and fast guidelines for advisory board compensation, but a mix of cash and equity is common. Depending on the organization’s phase of growth, geography and industry, some advisors take a long-term view by investing directly or receiving equity, perhaps 0.25% of the company, in lieu of a cash stipend.

When one believes in an organization and its leadership, foregoing tangible financial benefit in the near-term can pay off. Let’s not forget the wise move that one graffiti artist made when accepting Facebook shares in exchange for a project. If you enjoy the work and believe in the organization, then a focus on the long term might pay off in a big way.


Whatever your expertise, chances are good that there is an advisory role for you. In upcoming posts, I will explore ways to find and create these opportunities. In the meantime, it might be time for you to reflect on your network and the specific gifts you could offer.

Question: Have you ever served an organization as an advisor? What did you enjoy most about the experience?




Why You’ll Absolutely Love Serving on Advisory Boards

by Tamara time to read: 3 min