What is an Advisory Committee?
An advisory committee is a group of independent experts who provide non-binding advice and recommendations to a company, government body, or project. Their primary role is to offer guidance based on their expertise in specific areas but with no legal or fiduciary responsibilities.
Who should be on an advisory committee?
An advisory committee can include a combination of external experts or internal members. Specifically, it should composed of the following:
- Subject matter specialists in areas, such as finance, law, technology, or governance.
- Community or stakeholder representatives, particularly in sectors like governments or nonprofits.
- Thought leaders and innovators who can bring in fresh ideas and stay ahead of industry trends.
What are an advisory committee’s roles and responsibilities?
Besides providing specialized knowledge and insights on specific business issues and projects, the scope of an advisory board’s role can include the following:
- Review and assess proposals or plans for business strategies and policies.
- Monitor project implementation with the power to hire a project manager, but may not manage daily tasks.
- Track the success and impact of specific projects.
- Bring in outside viewpoints that challenge internal assumptions for a balanced approach.
- Advocate for the organization and raise its profile by promoting its mission and initiatives within its industry or networks.
- Support the decision-making of the organization’s board and executives.
- Represent the interests of key stakeholder groups to ensure their concerns are considered during decision-making.
- Build relationships with stakeholders, such as industry partners, community members, and government officials.
How do you organize an advisory committee?
Establishing an advisory committee can be particularly beneficial for businesses going through changes or have plans to take new strategic approaches. Below are some steps in creating an advisory committee:
- Determine the committee’s purpose: The first thing to do is clearly articulate the organization’s mission and determine the specific purpose of why you’ll need an advisory committee. Doing so can be useful when looking for committee members or knowing what types of experts you will need to hire.
- Create the membership criteria: Next is to identify the ideal qualifications, skills, and experiences for the committee members. It’s always ideal to include diversity factors such as gender, ethnicity, and age. Overall, make sure to choose members with varying levels of expertise.
- Prepare the recruitment process: Potential members can be found through recommendations, networks, or professional organizations. Once you’ve identified the potential members, extend invitations to those who meet your criteria. You can then use a formal application or nomination process to officially hire the members.
- Develop a committee charter: To serve as a reference for the members, it’s vital to create a charter outlining the committee’s purpose, membership criteria, roles, and terms of service.
- Schedule the meetings: The frequency of meetings should be based on the advisory committee’s priorities and workload. If necessary, set a regular meeting schedule and relay it to the members. You can also appoint a chair or facilitator to lead the meetings and prevent off-topic discussions.
- Evaluate the committee members: Regular evaluation of the committee’s performance is always a good practice. This ensures you have a high-functioning committee that can actively support or guide your business. Seek feedback from the committee members themselves and the stakeholders. Doing so identifies if there’s a need to make adjustments to the committee’s structure, processes, or even the membership.
Advisory Board vs. Advisory Committee
Compared to an advisory board that focuses on high-level strategic issues, an advisory committee often concentrates on project-specific matters. In terms of meetings and time commitment, an advisory committee usually meets more frequently than the advisory board. Both groups, however, may or may not have a formal legal status within the organization.
Example of an Advisory Committee
One example of an advisory committee is the Small Business Advisory Committee (SBAC) in the United States, which is made up of trade groups and members of the general business committee. Established by the Financial Accounting Standards Board (FASB), the SBAC is formed to advise on matters relevant to small businesses and emerging companies, from accessing capital markets to reducing regulatory burdens.