Advisors are taking their business expertise out of the box and stepping up to future-proof today’s SMEs and corporate firms.
Businesses of all sizes are latching on to the trend for appointing a customised advisory board comprised of independent advisors with skills and experience pertinent to a firm’s current needs.
The maps important trends that are shaping advisor engagement, shares the latest sector research and explores the changing landscape in advisory boards.
Research by the Advisory Board Centre shows advisors are seeking fresh, relevant ways to provide specialist expertise and add real value to a business at a time when business leaders globally are looking for non-biased advice from their peers.
It’s a growing phenomenon.
The Advisory Board Centre 2019 State of the Market Report reveals a thriving sector with at least 1.3 million advisors operating within an estimated 434,000 advisory boards worldwide.
Report author and CEO of the (the Centre), Louise Broekman, says “The growth of the advisory board sector is a direct response to the new reality of how the business sector is sourcing advice. Democratisation of advice is the new trend.”
Sandra Poon is a business transformation specialist and Advisory Board Centre Certified Chair. After working with 50 organisations over 20 years Sandra decided it was time to get off the corporate bus and use her experience and knowledge to help others:
“I wanted to make more of a difference to the businesses I associate with and help them grow. I needed to get out on my own and find a way to use all the corporate knowledge that was packed into my brain to help others,” she says.
“My role as chair is to make sure the board provides the best advice possible. It is then the responsibility of the business owner to act or not on that advice.
“The board’s role is to show them a pathway to change that is achievable and doesn’t take them away from their core business.
“The real satisfaction comes when the advice works and you see a real transformation in the business.”
Advisory boards are increasingly able to offer a unique perspective on businesses at all levels: emerging businesses, ambitious mid-market organisations, multi-nationals, and corporations.
The Advisory Board Centre 2019 State of the Market Report estimates that 6% of businesses in the OECD ($1.5m to $100m in revenue turnover) show strong growth potential and are strong candidates for advisory boards.
In 2018, 92% of advisor appointments were for new advisory boards, and 8% were for existing advisory boards.
High profile banks including the Bank of America, JPMorgan Chase and Deutsche Bank are adopting a Corporatised Advisory Board model, while emerging firms are choosing to bring in advisory chairs as mentors, the first step to establishing a full advisory board.
The latest report reveals the key drivers for appointing an advisory board are:
● Growth (74%)
● Succession planning (17%)
● Increasing asset value of the business (5%)
● Sustainability of operations/business model (5%)
According to Broekman “Every organisation has unique goals, ambitions and challenges. But our research has exposed a common problem in the process. Decision makers rarely know how to navigate the structures between management, external consultants, advisors, and governance.”
The report reveals just 12% of decision makers are clear about their needs with 88% requiring assistance to identify priorities and match advisors to their needs.
Worldwide there is a demand for education, minimum standards, advisory board member curation and monitoring. Trust and independence are in the spotlight within the professional services sector globally and this puts the need for advisory board best practice front and centre.
The Centre’s research findings are backed up by key initiatives including The Advisor Concierge, complimentary support available to organisations seeking clarity on priorities, advisor options, and connections to advisors; programs for advisors and chairs in developing their skills as advisors; methods for formalised Advisory Boards adopted globally by businesses and advisors; and carefully curated chairs and advisors for organisations to access
