'Providing Highly Effective & Complementary Expertise Of Non-Executive Directors In Advisory Board'
Advisory board services
We, Consultdustry, screen, select, contract and monitor independent professional advisory members and offer these services to SMEs and local branches of MNCs in the engineering / industrial sector in ASEAN countries and China.
Our advisory board services are:
• provide as a full-time or temporary member of the advisory board as a non-executive director
• search and recruit a member to a given profile description of the non-executive director
10 main business challenges of today
Businesses and industry today do face countless challenges where the assistance of advisory members can make a hugely positive contribution. With our advisory board services we recruit independent professional advisory members, who can increase the effectiveness of companies. Assisting the CEO, other members of the executive board (business executive committee) and even the supervisory board of directors in the current main challenges of a company, topics such as;
- quantitative and qualitative development; not only improve and increase the operating result but also (timely) innovate to guarantee continuity.
• financial management
- correct and forward-looking financing and financing arrangements, cash flow control and investment policy.
- recruiting and retaining key personnel, but also expand the flexibility and limiting dependence
- matters as corporate governance, government, tax, insurance and privacy legislation, health safety environmental issues, trade terms - regulations and their changes are a constant challenge; violating these do usually have disastrous consequences.
- solving problems and making decisions requires knowledge and experience, offering analyses and studies, openness and joint discussions with well-considered options, but also where failure to recognize problems, rejections or postpone decision-making will lead to a further decline.
• risk management
- these ‘business challenges’ list already gives an overview of many risks that companies are being confronted with, but also think about it; management and project failure, uprising or strike and interruption of business operations, reputation damage, economic downturn, cyber-crime, political risks and uncertainties, legal liability. Up-to-date monitoring and expertise regarding mitigation plans can provide a timely solution and/or limit adverse effects.
• change management
- the impacts and consequences of changes in leadership, vision/strategy, systems (structure, process, technology), resources, culture etc. cannot be underestimated.
- connecting business networks and possible introductions to (potential) customers, financiers, major suppliers, knowledge institutes and lobbyists and government policymakers can be beneficial and effective.
• market and competition
- continued alertness is offered by increasing and new competition (possible entrants from emerging markets), changes in customer needs and trends, complexity and results of globalisation/international business, the pressure imposed on time to market, new technologies, decreasing revenues and returns etc.
• strategic planning
- deepening and testing analysis, reflection with adequate consideration of options in decision-making, overseeing the implementation effects, progress and results and some supporting implementation processes.
Supervisory board or advisory board or both?
Previously mentioned challenges are comprehensive and to be able to act vigorously (alert and expert), a supervisory board and/or advisory board can be established. A supervisory board can be required by law, but these boards can act complementary to each other.
Supervisory board members have far-reaching powers, and their liability is in accordance with the executive board members. A supervisory board monitors the policies and corporate governance. As said; not every company or SME has or requires a supervisory board, as the obligation is usually imposed on a certain annual turn-over, certain capital size and a certain number of employees.
An advisory board generally has a practical approach with a greater current and applicable knowledge of the company, processes and activities, markets and stakeholders.
Management, supervisory directors and non-executive directors have a special relationship: they are a team towards the stakeholders and shareholders. Internally they sometimes apparently compete against each other, but always to create and achieve the best business policy.
Supervisory Board role - formal supervisor
The Supervisory Board manages the company on behalf of the shareholder and monitor policy and the proceedings of the executive board. In a broader view, one can say that the Supervisory Board is expected to involve the interests of multiple stakeholders (shareholders, employees, financiers, society and others) in the supervision and to make a careful assessment in this regard. This supervision of the supervisory board of directors includes:
• the realisation of the objectives of the company
• the strategy and the risks associated with the business activities
• the design and operation of the internal risk management and control systems
• the financial reporting process
• compliance with laws and regulations
• the relationship with shareholders and other stakeholders
• appoint committees (of non-executive directors)
Advisory board benefits
An advisory board of independent professional advisory members / non-executive director will add value
• an added value of experience & expertise
• high effective and efficient
• reliable, consistent, longevity and background knowledge
• complementary to and non-interfering with authorities; the existing board of directors
Advisory Roles and Subjects - Advisory Board Members / Non-executive Directors
Specific knowledge and experience for a contribution in
• research and intelligence
• delegate of the parent company (understanding & distance control)
• counsellor, mentor for board and executives (oracle, confidential, tester)
• second opinions and advice (unbiased insights and ideas)
• provide a networking platform and business contacts
• monitor business performance and encourage sustainable growth
• risk analysis and mitigation advice
• structuring business
• strategy development and implementation
• business plans (new) and development (encourage and support)
• financial forecasting
• banking and finance
• marketing strategy
• product and/or service development
• technical matters such as R&D, engineering, manufacturing, supply chain etc.
• recruiting; board and other directors
• in general, all management support on request, although a non-executive director can provide unsolicited advice
Enumerating all this, we can compress this into 7 roles, probably practical combinations, namely;
• human resources consultant and organisation consultant
• strategic advisor and supervisor
• counselor and expert
• sounding board and business mentor
• networker and ambassador
• fixer and troubleshooter
• external compass and ombudsman
image: Advisory board roles, non-executive directors providing unsolicited advice
Human resources consultant and organisation consultant
Making a specific contribution to the selection of executive board members and other key personnel, and other organisation and personnel-related matters such as mediation in internal conflicts, assessments, follow-up and transfer and dismissal issues. The role and responsibilities of an advisory board member are limited compared to a supervisory board member since the latter can often also be regarded as an ‘employer’ due to the powers to appoint and dismiss CEO and executive board members.
Strategic advisor and supervisor
Establishing, assessing and supervising the policy pursued. Rather than looking back on the policy that has already been implemented (and the assessment thereof, is, in particular, a supervisory board task), but more future-oriented, the substantive formation and substantiation of a strategic plan and the effectiveness of the implementation. An advisory board should act as an inspirer and less as an inspector/assessor. Business improvement and reducing risks are, after all, the main objectives.
Counselor and expert
This is by far the most comprehensive task of an advisory board and with which companies and management can take advantage. However, organise and employ an advisory board in a targeted manner as the degrees of freedom in the role of advisor can also lead to potential conflicts. The counsellor role concerns the provision of practical experience - gain experience - concerning entrepreneurship, specific professional knowledge, business processes and/or business development.
Sounding board and business mentor
Sharing worries and ideas for better results. Reflection, broadening vision and views, giving solicited (and/or unsolicited) advice, supporting decision making. A good business mentor ensures personal and business development, provides reassurance and trust, partly because thoughts are better ordered and well-considered and conscious business decisions are made.
Networker and ambassador
Every company depends on external parties, which partly determine the success of the company. Non-executive directors can play an essential role in maintaining or entering into these relationships with buyers, financiers, suppliers etc. In addition to networking, advisory board members contribute to the promotion of business norms and values and the reputation of a company. Naturally, any conflict of interest must be prevented between personal and business interests at the representation by non-executive directors.
Fixer and troubleshooter
The delegation of specific management tasks because these can be temporarily better managed by a non-executive director / advisory board member is becoming more common. Objectivity, available time, expertise or strategy can be the reasons for this delegation. The motto is always; temporary and still under the final responsibility of the executive board. After all, a non-executive director does not have a hierarchical position with decision-making authority.
External compass and ombudsman
Stakeholder management lies primarily with executive management, but stakeholders will certainly proactively approach non-executive directors from the point of view of their own interest and information transfer. Advisory members can be extremely useful as a filter and from a risk management perspective. However, this role listens very carefully and requires predefined frameworks and periodic coordination, mainly as the executive board is intended to manage expectations and possible escalations.
Organization and attention of advisory Boards
• appointment as non-executive director in an advisory board
• mandate and goal of the advisory board
• size of board and committees
• meeting organisation and frequency
• term of membership
• chemistry between members
Read more - Blog
What is an advisory board and a board of directors
Advisory boards and non-executive directors 1 - definition & role of an advisory board
Advisory board and non-executive directors 2 - 10 guidelines for an effective advisory board