Creating an Advisory Board That Actually Works
Advisory boards are one of the most undervalued and underutilized tools available to founders and business leaders. Done right, they provide game-changing expertise, strategic insights, and connections that can accelerate a company’s growth. Done wrong, they become a time sink with little return on investment—and unfortunately, most advisory boards fall into this second category.
Why? Because they’re often structured incorrectly and managed inefficiently.
The Common Pitfalls of Advisory Boards
Most advisory boards fail for one key reason: the person trying to extract value from the board spends more time updating the advisors than actually benefiting from their expertise. This happens when:
There’s no clear structure for how advisors contribute.
The CEO or leadership team spends too much time preparing materials instead of leveraging insights.
Advisors aren’t informed enough to provide meaningful input.
There’s no strong board chair to bridge the gap between management and advisors.
How to Build an Advisory Board That Delivers Real Value
To create an advisory board that actually helps your business, you need three things:
The Right People with the Right Expertise
Don’t fill your board with impressive names just for the sake of it.
Select advisors with specific skill sets that align with your company's challenges and growth goals.
A great advisory board is made up of domain experts, industry veterans, and connectors who can provide real guidance and open doors.
Ensure the advisory board aligns with your company’s strategic plan. If M&A is part of your growth strategy, having an expert in that field is essential. If you’re focusing on international expansion, bring in someone with global market experience. Advisory boards should be built with purpose, not just prestige.
Compensate Them Properly—Small Equity, Big Buy-In
Paying advisory board members in a small amount of equity creates alignment without being cost-prohibitive.
This ensures they have skin in the game while keeping their incentives in check.
The ideal structure is a two-year term, ensuring advisors stay engaged but allowing for rotation if needs evolve. Pair this with a two-year stock option vesting schedule to keep incentives aligned.
Avoid excessive compensation structures that turn the board into a financial burden.
If you don’t want to give away equity, the Advisory Board Centre details some other options here.
A Strong Chairperson to Keep It Running Smoothly
The advisory board chair is the secret weapon of a successful board.
This person should interact with management regularly, stay informed on company priorities, and act as the point of contact between the advisors and leadership team.
The chair ensures that when the CEO or leadership team needs strategic input, they can get it instantly without spending hours bringing advisors up to speed.
One of the biggest mistakes is leaving the advisory board to the CEO to run.
Kerri Carlyon, Director of Development, Stetson University, shares some useful thoughts on Key factors to creating effective advisory boards here.
The True Value of an Advisory Board
When structured correctly, an advisory board becomes an on-demand team of experts ready to help your business navigate critical decisions. Whether it’s refining strategy, opening doors to new partnerships, or avoiding costly mistakes, the right advisory board can dramatically accelerate your company’s growth.
The difference between a high-value advisory board and a waste of time comes down to structure, leadership, and engagement. Get it right, and you’ll have a powerful asset at your fingertips.
At Founded Partners, we don’t just advise businesses—we build and run advisory boards for select clients, ensuring they have the right expertise, structure, and leadership to drive real impact. If you’re thinking about creating or optimizing your advisory board, let’s talk.