Five Moments When Every CEO Should Consider Establishing an Advisory Board

In business, timing is everything, and knowing when to seek external perspective can make the difference between growth and stagnation. In The CEO Game Changer, Anthony Moss reveals the critical moments when every CEO should consider establishing an Advisory Board. From managing difficult shareholder conversations to navigating market shocks, these turning points often define a leader’s trajectory. The following extract outlines five pivotal situations where an Advisory Board can be the game-changing advantage.

1. Externally driven need for change
   A company facing volatile change, where either a multitude of opportunities and strategic choices need to be made, or several new threats need to be mitigated. For example, in early 2020, when COVID-19 spread across the globe and lockdowns ensued, many businesses were either forced to close or mothball. Even if they were not forced to close, the channel to their end-user was closed.

   How does a CEO respond to such a situation? Faced with such existential threats, an Advisory Board can provide the skills, objective perspective, and appropriate decision-making framework to enable the CEO to again make confident decisions, both tactically and strategically.

2. Leading up to, or shortly after, a change in equity
   For example, during a longer-term exit strategy, there is typically a need to build organisational maturity and rigour into the business, particularly where a founder seeks to exit. Often, there needs to be an investment in people, brand, intellectual property protection, and systems to maximise the value of a potential purchase. An Advisory Board can provide guidance through this process.

   Often, after a significant change in equity, there may be a change in CEO, the strategy, or other key leaders in the organisation. The new shareholders/directors can have a different appetite for growth; they may wish to move faster or slower, more aggressively or more conservatively. An Advisory Board can fill the skills gap identified via the strategic planning process.

3. There is a need to manage difficult conversations at the highest level
   Difficult conversations within a leadership team or between directors or shareholders can be a huge source of inertia. Consider the scenario where two shareholding directors, each owning fifty per cent, have a common vision but a different perspective on strategy or execution.

   The business can be hamstrung on issues where an agreement cannot be reached. The result can be, at best, inertia that holds the business back. At worst, if positions are intractable, the business may be wound up. An Advisory Board can objectively navigate difficult conversations and enable decisions, freeing the business to move forward.

4. There is a desire or need to improve governance but not an appetite to appoint independent non-executive directors
   There may be an appetite to establish a more rigorous governance framework to improve decision-making, address multiple stakeholder interests, build organisational maturity, ensure regulatory requirements are met, or meet investor requirements.

   However, at the same time, there may not be an interest in appointing non-executive directors to ensure no dilution of control. The Advisory Board, while not a governance structure, can give the CEO perspective and a framework of appropriate steps to take and their relative impact.

5. It is a family business
   Family businesses can be complex. There is often tension between the leader’s role as executive and their role as a family member. That tension can be amplified if there is a
   mix of family and non-family members at the executive level. Family businesses can benefit from an Advisory Board’s objectivity in working through these tensions.

   Occasionally, the CEO can start to doubt their capability. They have been successful but now recognise that new skills are needed. Are they the right person to take the business to the next level? An Advisory Board can help the CEO work through this dilemma by providing mentoring or working through alternative solutions.

The CEO who appoints an Advisory Board should relish the opportunity it provides and the accountability it requires. If that sounds like you, then you probably have a thirst to succeed, matched with a thirst to learn from those with the skills and experience you don’t have. This is just the right mindset you need to embark on your Advisory Board journey.

Written by Anthony Moss, edited extract from The CEO Game Changer: How an Advisory Board Can Unleash Your Business Potential. Have you read?
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