Have you ever thought of creating an advisory board?
As you can guess, that would be an informal group with no legal responsibilities, but one able to be called upon to act as business, industry and scientific advisors to the company or CEO.
Why?
Usually, you would want to create an advisory board to fill in the critical areas of need not
evidenced in the board of directors or within the company itself. University professors, industry gurus, lawyers familiar with patent law and former executives of competitor companies are typical recruits you might consider. Sometimes, celebrities will agree to sit on an advisory board as a gift to the CEO, providing a bit of glamour for the company at small expense.
How about the size of the group?
There is no limit to the number of individuals for such a board, but there is a practical limit to the amount of cash and / or stock to be allocated to these outside advisors. The rule of thumb for an advisory board member is to expect a half to a full day each year on site, typically in a strategic planning meeting with numerous members of the staff, as well as some reasonable number of phone calls from senior members of management during the year.
How about using the names for marketing, fundraising?
Included in the “package” is the expectation that the advisor’s name will be freely used in the company’s marketing, a bio listed on the website, and occasional calls will come as references to the advisor from potential investors and others looking for deeper insight into the secret sauce of the company or state of the industry than can be provided by many on the inside.
And now the expected cost…
[Email readers, continue here…] For this, an advisory board member for a small to medium sized company should expect to receive options equal to ¼% of the fully diluted 
stock of the company, vesting over two years, and subsequent grants if there has been additional stock issued to dilute the advisor, bringing the advisor back to this percentage if an advisor is renewed after subsequent two-year intervals. Alternatively, some companies pay an advisor a fee of $1,000 to $2500 per “on premises” meeting day and optionally much smaller stock grants, if any.
What if an advisor acts as a consultant with more time?
Additional commitments of time by an advisory board member should be compensated as would any consultant, at half and full day rates agreed upon in advance between the CEO and the advisor. There is no rule as to uniformity of pay, as some advisors may be willing to serve at no cost while others are industry consultants used to receiving fair payment for services rendered.
Create a formal advisor agreement listing expectations.
Advisors fill blind spots in the corporate knowledge base and guide you in areas where you feel you have a personal weakness. There is usually a formal agreement between the company and the advisor, carefully calling out the time expectation, the forms and amounts of payment, and the indemnifications from liability granted by the company to the advisor in return for confidentiality and non-disclosure of company trade secrets by the advisor.
How about “chairman” of the advisory board?
A particularly strong advisor, especially if well known, may be named chairman of the advisory board, which is often just an honorary title, since the CEO is usually tasked with the planning of the full day meeting of advisors annually, and setting the agenda to match the needs of the corporate board and senior management.
in a person, is knowledgeable about the business process, and who has an extended list of relationships to call upon to fill needs that become obvious in the coaching process. 
Some larger communities have organizations of corporate directors, composed of a combination of service providers and professional corporate directors. I’ve personally been involved with the ABL Organization for over thirty years and share problems and solutions with a monthly roundtable of smart CEOs from companies of all sizes.
experience in exchange for equity – and managing to become wealthy in the process by picking and aiding great young companies that grew large and were ultimately sold at a tremendous profit. We had no term for such work in those days and created the phrase “resource capitalist” to describe the person and process. He brought resources to the table from personal experience to a great contact base and was able to help speed the time to market while introducing the company to great potential buyers at the right time in the process. His average percentage of a company was 5% in return for spending a day a week as I recall.
planning for a new office is done with an optimistic view of the future, incorporating planned space that compromises only slightly the measured needs for the next three or more years as outlined in the financial forecast. Yes, we can mitigate that with starting with a reduced size given the current remote and hybrid work environment.
The distractions are dealt with using earphones with their smartphones, concentration and tolerance; but they are dealt with by all. The change to a near silent environment is so startling that, many times, employees express a bit of resentment or even depression, masked by the common statement that “it is so much easier to get work done without the noise.” It is the excitement of activity that generates more and better output for most, not the isolation of silence.
venture investors will not survive three years from funding to demise, and more than that percentage will die with two years if not well financed. The greatest burden of either a growing company or one needing to retract and reduce expenses is the office lease – especially in these years after COVID and remote work. Although payroll is almost always the greatest cost, companies have flexibility as to how to handle both rapid growth and rapid decline in the personnel arena.
It is a hassle to move, requiring time and planning. It is much worse to worry overpaying for two leases each month and tying up two large deposits. Or honoring a personal guarantee if the company cannot pay.
decade of maintaining a fixed office location. She organized morning conference calls, had each employee tweet the others in their department when starting work and ending the day, creating the feel of closeness with employee contests, and rewarded her best salespeople by assigning them the best leads, creating an environment where the best excel and those unable to cut it in a virtual environment fall out on their own accord for lack of revenue.
As you see from the story above, it does take more creative management to make this work. It is a management skill that was not taught nor learned until recent times. A creative CEO will find ways to motivate and compensate for the lone nature of working alone, but using social networking tools to make office workers and home workers feel and behave as a unit. After all, with this generation of texting, tweeting, IM-based workforce, you’ll find as much of this kind of communication from adjacent cubicles as from distant home offices.
company looking to expand into the United States. During the discussions with the CEO about hiring North American managers, he made it clear that he wanted us to find a first-class office facility from which to start the search process, and proceeded to name cities that attracted him. Even after discouraging him from this backwards method of infrastructure-building, he kept bringing up the subject in subsequent months as new senior managers and salespeople were hired, each starting with an orientation week at the Asian headquarters then returning to work from home.
With audio and video conferencing and all the tools for communication and collaboration available today, each of these four new employees felt empowered, connected and enthused to work from home for the first time. The CEO was still talking about finding an office when the natural progression of growth made it obvious that two of the four needed to be replaced. These two worked from homes in widely scattered cities. Had the office been located to accommodate either one, the company would have had to find replacements in the same geographical area as the office. Without that restriction, outstanding replacements could be located based upon skill and experience, not location.
flexibility as those they manage. So, one of the advantages of new or young employees – having visibility and time with their managers – cannot easily be realized, frustrating the employee who made the extra effort to come into the office.
appropriate individuals, a bonus program aligned to the department’s goals is appropriate. But how about awarding stock options to all employees?
They should know this, and from you not from the rumor mill. Your fear that the confidential information may get out to the industry competitors should be tempered by the fact that you are not giving out the secret sauce, just the results of the past period’s performance.
guide to great negotiating. I’ve read and reread the book a number of times and find myself using the techniques often in many areas of my life. One of his lessons remains clearly on my mind and is a variant of the old “You name the price and I’ll name the terms” challenge that works so well in negotiation.
stock options. That of course jumps to the top of the list for young, fast-growing technology companies. Many skilled, experienced executives have jumped from mature companies to more risky positions in smaller, fast-growing enterprises primarily for the options. In a previous insight, we explored the common percentage of a company’s fully diluted stock that is often granted in the form of options for new employees.
items were completely achieved in one year. Upon reflection, he stated that revenues could double the following year, and that the company’s reputation among larger customers would be so greatly enhanced that the company could become the leader in its niche. My obvious retort: “Then why not offer this candidate the moon if he can achieve this?” The offer was sent and the CEO was much happier, dreaming of the possibilities, not the incremental cost.
It is amazing how few company CEOs grasp the concept that executives and managers should be compensated not just for doing their named job, but for exceeding expectations while advancing the corporate goals. To align everyone in the organization in exactly the same direction is a task, one that is a powerful driver for growth. People should be compensated well for such outstanding contributions.
