We have a regional CPA (accounting) and business advisory firm, and we
are thinking about having an advisory board to help us -- not sure
benefits and if there are any case studies of how to set on up, and
who should be on it.  Do we pay them, how much?

Dear jim1946,

You requested information about setting up an advisory board for your
regional CPA and business firm.

There are three main reasons for setting up an advisory board –
1)	Increase and improve the reputation and visibility of your business
2)	Create an independent team that can act as a sounding board as well
as advise you on various issues
3)	Extend your network and reach out to access new business

I will now tackle each of the above three points in turn.

Not knowing much about your business, it is difficult to say whether
you are in need of increasing or improving the reputation and
visibility of your business, but unless your business is as well known
and reputable as Coca Cola or Home Depot, most chances are that you
could benefit from help in this area.  By creating an advisory board
that consists of highly respected individuals in your field, you will
essentially be borrowing some of these individuals’ reputations and
therefore enhancing your own.  However, you must take care to select
only such individuals that will indeed add to the prestige of your own
business, and not detract from it.

Such a team will also be able to contribute substantially in terms of
advice and feedback as needed.  Their being members of your advisory
board will create an implicit commitment on their part whether they
are compensated or not, although obviously the commitment will be
stronger the greater the compensation you choose to award them (see
more on this below).

Finally, a strong advisory board will extend your network and assist
you in retaining existing business as well as in finding new business.

Public companies will typically compensate advisory board members with
stock awards or stock options, but it does not sound like your
business is public.  In the past, I have compensated advisory board
members with commissions, but typically, in a private company that
does not really have prospects for going public, they’d be working
from good will and you should pamper them with wonderful dinners and
maybe a golfing weekend once a year.  You may also want to consider
setting up a profit sharing program so that you are able to provide
them with some cash compensation.

A bit more information about setting up an advisory board can be found
at the following links –

Good, short article on selecting an advisory board –

http://www.dinte.com/perspective.html

An Austin Business Journal article from 1999 – 

http://austin.bizjournals.com/austin/stories/1999/10/18/focus6.html

I hope this response adequately addresses your request.  Please let me
know if you are in need of additional information concerning this
query.
Thanks,
ragingacademic


Search Strategy:

1) “selecting an advisory board”
2) “setting up an advisory board”