There are lots of reasons to join the advisory board of a company. Such as adding variety to your business life, making new and valuable connections, and the satisfaction of contributing to an organisation’s success.
Whilst monetary compensation is likely not going to be your primary motivator in choosing an advisory assignment, many assignments are remunerated in some form to compensate you for the experience, insights and network that you may bring to the table. Remuneration comes in a variety of different forms and levels, and will be influenced by the following:
- Is the organisation an established, profit-oriented company, a start-up or a charitable organisation?
- What is the size of the organisation?
- If a start-up, has the firm already successfully raised funding?
- What is your expected, measurable impact on the development of the organisation?
- How much of your time will your advisory role require you invest?
Compensation can vary hugely depending on the above variables. At the very least, advisors can normally be expected to have their expenses reimbursed. At best, for large or very profitable companies, advisors can expect to be remunerated several hundred thousand euros for their guidance and impact. Remuneration can be calculated on a fixed-rate based on the expected or actual amount of time you invest, or linked to the financial success of the company under your guidance – for example in form of phantom shares, profit shares of generated leads, or of a grant of other securities in the company.
Before you make your decision on whether to accept an advisory role which may appear to be paying less than what you have envisaged, do consider the following:
- What might this advisory seat do for my career, network and gravitas?
- Is this assignment likely to raise my profile for future, larger advisory board or corporate board assignments?
- Is this an opportunity for me to give back to society, either in a charitable or economic form, which will be gratifying?
Being a part of an organisation’s growth story can be immensely satisfying, and prove a source of great personal development too, an opportunity to work alongside other sharp minds and entrepreneurs from different sectors.
In summary, be aware of your value but don’t let pride get in the way of experiencing an exciting growth opportunity!
For detailed information on remuneration models, please consult the file library in the members‘ area of Board Owl’s website.
