The Role and Impact of Advisory Boards

In a recent Athena Alliance salon, Betsy Atkins—an esteemed figure in the board landscape, having served on 34+ public boards—provides deep insights into the functions and value advisory boards bring to different types of organizations.

October 16, 2024
peer groups

By Betsy Atkins

 

In the business world, advisory boards are strategic resources for companies at all stages of growth. From large public multinationals to smaller venture-backed firms, advisory boards play a crucial role in guiding leadership teams through various challenges and opportunities. In a recent Athena Alliance salon, Betsy Atkins—an esteemed figure in the board landscape, having served on 34+ public boards—provides deep insights into the functions and value advisory boards bring to different types of organizations.

 

The Role of Advisory Boards in Public Multinational Companies

Public companies establish advisory boards for various reasons, typically aligned with their strategic goals. A great example comes from my experience chairing British Telecom’s Advisory Board. British Telecom was looking to transition into managed services, similar to the models of Accenture and IBM Global Services, and sought the guidance of an advisory board to navigate this new venture. This board helped the company think through its strategy and execute it globally, including in Europe and the U.S.

Similarly, I chaired SAP’s Advisory Board, which was created with a dual focus: to mentor and upskill their leadership team and to help elevate their presence from solely addressing the CIO to engaging the broader C-suite, particularly at the board level. SAP’s advisory board was also instrumental in helping the company think through its go-to-market strategy across different verticals, such as financial services, pharmaceuticals, retail, and consumer goods.

Large multinational companies like Pepsi, Novartis, and Sanofi often have multiple advisory boards, each focusing on different aspects of the business. Some common types include:

  • Customer Advisory Boards: These boards provide insights into customer needs, preferences, and challenges, helping the company align its products and services accordingly.
  • Technology or Roadmap Advisory Boards: These focus on helping the company navigate the complexities of technological innovation and product development.
  • Go-to-Market Advisory Boards: These boards assist in devising strategies for market entry, product positioning, and sales growth.

For non-U.S.-headquartered multinationals, having advisory boards based in the U.S. is especially valuable since North America is often the largest, most profitable market. Additionally, some companies create advisory boards to gain visibility in Washington, D.C., for policy and lobbying purposes, particularly because the U.S. government is often a key customer for large corporations.

Advisory Boards in High-Growth and Venture-Backed Companies

In contrast to large multinationals, high-growth companies—especially those backed by venture capital or private equity—have different needs when it comes to advisory boards. For these companies, the focus is often on scaling rapidly while navigating the challenges of hyper-growth. Fast-growing companies often need to change their leadership teams frequently, as the skills required to take a company from $20 million to $40 million in revenue may differ from those needed to take it from $0 to $20 million.

Advisory boards in these environments often help with:

  • Product Roadmap Development: Guiding the company’s product strategy and ensuring that it aligns with customer needs and market trends.
  • Go-to-Market Strategy: Offering insights on pricing, packaging, lead generation, customer acquisition, and retention.
  • Scaling Operations: Providing advice on how to add process and structure without stifling the company’s agility.

A key aspect of being on an advisory board in a high-growth company is leveraging your network, but it’s important to be clear about boundaries. While relationships are valuable, advisory board members should not become de facto sales representatives. The focus should be on strategy and providing guidance, not on generating direct sales.

Functional and Policy Advisory Boards

Another category of advisory boards focuses on specific functions or policy issues. For example, sovereign funds like Singapore’s Temasek often establish advisory boards to help them navigate global policy issues. These boards typically consist of senior executives and policymakers who can provide high-level guidance on geopolitical, regulatory, and economic challenges.

I currently sit on Suntory’s Advisory Board, a $55 billion distilled beverage company. This board focuses on global policy issues, including ESG (Environmental, Social, and Governance) matters and the political landscape in the U.S. For example, the board recently discussed the differences between the two major U.S. political parties and how those differences might impact Suntory’s business planning, particularly in areas like tax policy, regulatory frameworks, and energy costs.

These types of advisory boards are often driven by the CEO’s interests and strategic goals. Whether it’s policy advisory boards, supply chain boards, or product-focused boards, the key is to provide value that aligns with the company’s overarching objectives.

How to Find or Create Advisory Board Opportunities

So how does one find advisory board opportunities? It’s often a mix of being in the right circles and creating the opportunities yourself. In some cases, I’ve proposed the creation of an advisory board where none existed before. For example, when contacted about a potential board role at a California-based company, I suggested the creation of an advisory board as an alternative, which ultimately led to a valuable opportunity.

Another avenue is through existing relationships, particularly with private equity or venture capital firms. If you have strong relationships in these circles, it’s easier to find advisory roles with companies in their portfolios. For those with functional expertise in areas like product development, marketing, or post-merger integration, there are often opportunities to add value to growth-stage companies that need help in these specific areas.

Compensation and Career Growth Through Advisory Work

Advisory board roles can be financially lucrative, depending on the company and the scope of the advisory work. These roles typically involve meeting a few times a year, with additional calls or tasks in between meetings. For early-stage companies, compensation is usually in the form of equity. While not all equity-based roles will lead to large payouts, some can be highly rewarding. 

In addition to financial rewards, advisory board work can be a great way to stay current with market trends and business challenges. Being involved with companies at different stages of growth offers a unique learning experience, as each stage presents its own set of challenges and opportunities.

Advisory boards offer tremendous value to companies at all stages of growth, from large multinationals navigating global markets and regulatory challenges to high-growth companies scaling rapidly. For advisors, these roles offer the chance to leverage their expertise, expand their networks, and, in many cases, earn significant financial rewards.

Whether you’re interested in joining an advisory board or creating one from scratch, the key is to focus on where you can add tangible value—whether that’s guiding a product roadmap, helping with go-to-market strategy, or providing insights into policy issues. With the right mindset and approach, advisory board work can be a highly rewarding aspect of your career.

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