What are the benefit of bringing an advisory board to your firm?
That was the discussion at a session recently held at Toronto’s MaRS Discovery District, lead by Tony Redpath of MaRs and Karan Walia of mobile ad platform Cluep.
Redpath mentors entrepreneurs at MaRS, with an emphasis on environmental, advanced materials and manufacturing markets. MaRS Discovery District, launched in 2005, helps entrepreneurs launch and grow companies, explains its website.
Karan Walia is founder and CEO of Cluep, which touts itself as “a mobile ad platform that targets people based on their social media conversations and serves them ads on their mobile.”
According to their website, Cluep’s clientele include Toyota, Telus, Johnson & Johnson, Tim Horton’s, Red Bull, 20th Century Fox and many others. Despite the B2C nature of Cluep’s clientele, the lessons learned here can apply to any B2B firm.
The talk identified the difference between a board of advisors and a board of directors, and what roles they play in business.
“Advisory boards are there to advise you. You can listen to them as you see fit. Directors have responsibilities and authority,” explained Redpath, an advisor at Cleantech, as well as vice-president of Primaxis, president of EcoPlastics, founder of Solarchem, and consultant on environmental issues.
In terms of pecking order, shareholders elect the board of directors, who hire/fire CEOs, who hire/fire management, added Redpath. An advisory board is selected by management.
“The board of directors cares about making money, and doesn’t want to waste it,” Redpath noted. They oversee business affairs, have legal obligations, have the power to hire and fire, and must put in hundreds of hours of time commitment.
In contrast, the advisory board is as much about the idea-sharing as leveraging the proverbial six degrees of separation.
“What advisors can bring is a network or a Rolodex that will help the business,” said Redpath. “Do not go with a big name – like an astronaut. People think a big name is important. It’s not.”
Walia agreed: “If they’re not there to help you make a home run, don’t bring them in.”
The best advisory members are ones who “maximize the utility of the group,” said Redpath. “Your uncle, the real estate lawyer, won’t do that.”
Added Walia, “If he’s an investor, he’ll advise you anyhow”.
In other words, avoid the temptation of reeling in “friends, family and fools,” said Redpath, even at the early stage of development.
Take the Artichoke Advisory Board of California, as one example cited in the panel. Artichoke growers may make for good advisors, but so would chefs, grocery chains and a climatologist, all of whom bring to the table a unique perspective.
One audience questioner inquired whether an advisory board would benefit from deliberate race and gender diversity.
“Colour doesn’t matter,” said Redpath.
“What matters is the quality of the individual and how they can help you out. It’s the same with hiring practices. You should be gender and race colourblind. Look for excellence. Look for the right fit.”
Photo of Tony Redpath (left) and Karan Walia courtesy Dave Gordon
Latest posts by B2BNN Newsdesk (see all)
- Have You Invested In Bitcoin? If Not, Here Are Some Good Reasons Why You Need To Do So This 2021 - January 23, 2021
- When Should A Business Look To Credit For Growth? - January 23, 2021
- Tips for Funding Your Business - January 23, 2021