The Future of Advisory Committees: Emerging Trends and Best Practices

The advisory board is one of the most important committees in the company, in line with the nomination committee or audit committee. According to a survey from the Business Development Council (BDC), companies with advisory committees saw a substantial 24% rise in revenue and an 18% improvement in productivity. Furthermore, the Wall Street Journal claimed that 50 Fortune 500 corporations have created digital advisory committees. Everything points to the rising recognition of the committees’ effectiveness.

This article delves into the role of advisory committees in the board of directors structure, examining how they contribute to a company’s success. It explores advisory committee responsibilities and best practices for building a strong board. As a bonus, readers may download the advisory board meeting agenda template.

What is an advisory committee?

An advisory committee is a group of experts responsible for guiding a company. They usually have specific expertise and experience related to the organization’s industry and challenges. Unlike a board of directors, an advisory group does not have decision-making authority. Nonetheless, their recommendations and services enhance decision-making in many companies worldwide. 

It is important to note that advisory committees are established under the Federal Advisory Committee Act (FACA).

An advisory committee’s composition varies depending on the organization’s demands. It means that members might be internal or external, having previous backgrounds in finance, marketing, technology, and industry-specific topics. Committees often meet regularly at change-advisory board (CAB) meetings to review current concerns, provide input on plans and strategies, and provide solutions when needed.

Advisory committee roles and responsibilities

While the particular functions of an advisory committee vary based on the company, some broad tasks remain similar. Let’s look at some essential duties the committee or advisory department typically performs:

1. Provide guidelines and insights based on their expertise.
2. Analyze and research plans, strategies, and documentation for better input.
3. Identify possible challenges and opportunities using their knowledge of the industry and market trends. 
4. Support the company in developing realistic and achievable objectives aligning with its long-term vision.                    
5. Use their experience and reputation to improve the public’s perception and trust.
6. Propose creative solutions and ideas to keep the company ahead of its competitors.
7. Share best practices and recommendations from the industries they work in to promote constant learning and growth inside the organization.

Benefits of the advisory committee

Ernst & Young highlights two critical foundations of good governance: a strong board interaction strategy and a robust information infrastructure. While these are important, organizations may use another strong instrument to improve their governance practices: advisory committees. Here’s what benefits these committees offer:

1. Companies have access to expertise and skills not easily available in-house, affecting their ability to address challenges as well.
2. Committees offer diverse perspectives, while external advisors encourage maintaining credibility.
3. Advisers help to establish public trust and confidence in projects.
4. The advisory committees represent a variety of stakeholders, ensuring that their perspectives promote a more inclusive climate in the company. 
5. The advisory council can trigger innovation and growth by challenging existing practices and norms.
6. Advisers’ networks help organizations access new opportunities for cooperation.

The purpose of an advisory committee

Advisory committees are significant assets to organizations because they provide support without having the capacity to make decisions. These board members bring unique viewpoints and specialized knowledge to the table. In particular, they bring new perspectives, question stereotypes, and find potential development possibilities. Unlike governing boards or remuneration committees, advisory groups do not issue formal statements. Instead, their primary purpose is to provide leaders with the knowledge and different perspectives required to handle complicated operations.

The flexibility of advisory committees is a significant strength. Their structure, scope, and individual member functions can be tailored to meet an organization’s unique requirements. This ensures that the advice they offer is both relevant and practical. Also, advisory committees become vital partners by cultivating a collaborative atmosphere based on shared knowledge.

Advisory board meeting agenda

Creating an appropriate agenda for an advisory board meeting is essential for maximizing the value of a team’s expertise. We focused on the following tips for designing an informative and flexible agenda template. 

1. Prioritize ruthlessly. Begin by selecting the most significant issues that require the board’s attention. Don’t overwhelm the agenda; instead, focus on 3–5 important topics.
2. Address key concerns. Anticipate board questions and concerns and allocate agenda time to address them directly.
3. Promote collaboration. Encourage participation from all board members. Use brainstorming, open discussion, and problem-solving approaches.
4. Clear communication is key. Share the agenda in advance by email, allowing board members enough time to prepare. Outline topics, intended results, and any pre-reading materials so that everyone is on the same page.
5. Leave room for flexibility. While structure is vital, allow room for unplanned discussions. Be prepared to change the agenda on the fly to take advantage of valuable contributions.

Still wondering about how to maximize the effectiveness of advisory committee meetings? Download our advisory board meeting agenda template that includes all the necessary additional information, such as briefing materials and subject analysis.

Advisory committee guidelines and best practices

Creating and running an effective advisory committee requires thorough preparation and adherence to best practices. Here are some strategies to help develop a perfect example of an advisory committee.

1. Recruit the right expertise

• Diverse skills. Prioritize individuals with complementary knowledge in the organization’s primary areas. For example, a fundraising committee might benefit from the expertise of marketing, financial, or philanthropic specialists.
• Seek diverse perspectives. Expand your network to include people with diverse backgrounds, experiences, and cultures. Studies show that boards and committees with high gender diversity are 28% more likely to outperform their peers.
• Balance industry knowledge with new ideas. Consider including both industry experts and those with fresh perspectives for better balance.

2. Define clear roles and expectations

• Outline committee charter. Create a written document that describes the committee’s purpose, objectives, and scope of tasks. 
• Clearly define member roles. Specify each member’s particular duties and expected efforts. 
• Establish communication protocols. Establish explicit norms for communication frequency, channels, and information sharing for better transparency.

3. Foster active participation

• Create agendas. Prepare clear meeting agendas for better collaboration on crucial issues. Set timeframes and share them in advance.
• Utilize technology. Leverage online collaboration tools and platforms to enable distant participation, information exchange, and real-time document editing.
• Recognize contributions. Actively appreciate and value individual efforts to build a sense of belonging.

4. Ensure transparency and accountability

• Regularly share updates. Summarize meeting outcomes, action items, and progress on suggestions.
• Periodic committee evaluations. Conduct periodical self-assessments or external evaluations to assess the committee’s effectiveness and suggest areas for improvement.
• Conflict resolution. Establish clear processes for handling possible conflicts of interest to sustain ethical behavior.

Key takeaways

1. Advisory committees are professionals who do not make decisions but provide advice to a company.
2. Advisory committees provide specialized experience and multiple viewpoints for making better decisions and accessing important networks.
3. An advisory committee agenda template keeps meetings focused, productive, and interesting by hosting discussions and prioritizing topics. 

FAQ

1. What is the difference between an advisory and a steering committee?

Advisory committees offer expert recommendations and insights while steering committees make decisions and manage resources.

2. How do you run an advisory committee?

To build a successful advisory committee, define your goals and expectations, form a diverse team with relevant expertise, and structure meetings effectively.

3. What does an advisory committee do?

Advisory committees counsel, identify growth areas, build relationships, and raise awareness for your organization. Members also bring specialized knowledge and diverse perspectives.