Thinking of setting up an Advisory Board for your family business?
We are seeing more and more of our private business and family group clients expressing an interest in establishing Advisory Boards. In addition to their trusted advisors, an Advisory Board helps our clients access experienced business professionals who can provide an independent and balanced view. It is worth making sure you think through what it is you need help with and on what basis before contemplating putting this structure in place.
Understanding Advisory Boards for family businesses
A Family Office is typically a multifaceted organisation that acts as an intermediary between family members and service providers to help secure the financial future and legacy of the family by building, preserving and transferring family wealth in a structured way. An Advisory Board can help families follow best practice when it comes to managing and growing their wealth by bringing a different perspective and insight that sits over and above the differing family personalities and agendas. Members of an Advisory Board can challenge the way things are done and thought about within the group and within the family dynamics which also adds value.
What are the benefits?
The seniority, objectivity, expertise and referral networks of an Advisory Board should not be underestimated. They often come into their own when there are significant decisions to be made or issues to be resolved as they have experience of resolving these in different scenarios and can help brainstorm the best way forward. Dealing with family succession issues for example can be difficult and a different view from someone with no vested interest is often helpful. Advisory Boards can sometimes be used to build and construct succession strategies if there is no obvious successor. Equally they are sometimes used to surface new ideas or as a precursor to putting a board of Directors in place, noting that this has a completely different function.
Finally, having an Advisory Board allows groups to flex in terms of strategic capacity. Such Boards acting as a confidential sounding board to business owners and family members, so it is worth thinking about them adding potential value to your Family Office arrangements to help with opportunities and challenges.
Should you have any questions or need assistance in relation setting up an Advisory Board, please call your ESV engagement partner or Sydney business advisor on 02 9283 1666.