By Marissa Levin
You’ve narrowed your pool to the right people to get you from where you are now to where you want to be. You’ve decided how to compensate them. Now, it’s time to make it official.
Bringing members onto your advisory board requires legal and administrative work to create an offer package that defines expectations, roles and responsibilities.
Letter of commitment (required)
Just as you give prospective employees an offer letter that requires their signature of acceptance, you must follow the same process to retain a board member.
A typical letter of commitment will include: a “thank you for joining us” message; clearly stated compensation terms; agreement to the vision, mission and values of the organization (provided in the letter); agreed-upon time commitment; agreement to prepare for, attend and participate in meetings; agreement to attend companywide events as available; and agreed-upon terms to separate, providing both parties with an opportunity to terminate the relationship.
Nondisclosure agreement (required)
The nondisclosure agreement (NDA) is mandatory for anyone in your organization who is privy to confidential information. Customize it for your advisory board members and specify that the NDA remains in place after board service is complete; not every board relationship ends well, so it is important to protect your company against unforeseen circumstances.
Noncompete agreement (optional)
Noncompete agreements can be contentious. You risk alienating some wonderful board candidates, not only because of who they might be serving now but because of who they might want to serve in the future.
This decision depends heavily upon your specific market. If your field has many competitors, it will be more difficult to enforce this type of agreement. If you can, identify specific companies you would want to prohibit them from doing business with; to insist on exclusion from an entire market sector isn’t usually reasonable. Of course, there are certain circumstances when a noncompete does make sense. For example, if your company is patenting a new product or bringing a new technology to market, those trade secrets must be protected.
Board manual (optional)
A board manual goes a long way in ensuring everyone has the same information. It commonly includes: organization’s vision, mission and values; organizational history; organization chart; contact information and bios for current advisers and company executives; roles for each board member, highlighting specific areas of expertise; and annual board calendar to gain early commitment for meeting dates.
Creating the right advisory board requires the same amount of administrative due diligence involved with bringing on new employees. Addressing these needs as soon as possible will ensure that your advisers can focus on what really matters — supporting your leadership team and positioning your company for growth.
I ________________________ agree to serve on the _______________________ board of advisers. As a member of this board, I hereby:
Commit to act in the best interests of the organization.
Commit to attend all scheduled board meetings.
Commit to attend company all-hands meetings.
Commit to mentor/coach the members of the management team.
I understand that the board meets once per quarter for four hours, and that there might be additional required meetings at any time. I will do my best to attend if I am necessary.
I understand that the board of advisers is an essential component to the growth of (company name), and that my participation is critical to its success. I therefore understand that if I do not live up to these commitments, I might be removed from the board.
CEO, (company name) Board Member Name
Marissa Levin is chairman of strategic communications firm Information Experts, and CEO of Successful Culture, a consulting firm that helps CEOs build excellent cultures. She is the author of Built to SCALE. www.informationexperts.com. Contact us at email@example.com.