Advisory boards have only fairly recently and, unexpectedly, boomed in popularity. Prior to 2019, such entities barely received a mention but, according to the Advisory Board Centre’s Annual Report, between 2019 and 2021 there was a 52% increase globally in organisations using advisory board services.

Despite this sudden surge in national and international growth, there is little research into what advisory boards actually bring to the table.

In the US, the number of non-profit and government advisory boards has grown exponentially since the introduction of the Economic Opportunity Act in 1964. Federal legislation required citizen participation in transportation, urban planning, energy adoption and distribution, education and social services programmes.

By the 1980s advisory boards became established as a favourable form of citizen inclusion and an effective ‘public’ check on funds being allocated to social initiatives.

The early benefits

From their earliest beginnings, advisory boards were viewed positively when they had a clear mandate, such as acting as a sounding board for new ideas to help businesses navigate through circumstances that presented substantial risks.

For example, the National Research Council’s Science Advisory Board was created through an executive order by President Franklin D Roosevelt in 1933 to further the relationship between science and technology and explore how government could harness this innovation.

And, in the UK, an advisory council on national records and archives was established in 1958 by the Public Records Act to advise the government on access to public records.

Advisory councils also operate in the education sector, where groups of parents and other stakeholders meet with school administrators to consult on various teaching and learning issues, as well as examine the growing focus on the business aspects of running a school.

These bodies typically attracted expert individuals from business, academia and not-for-profit organisations. Although members acted in an advisory capacity, their purpose was to provide independent and relevant advice.

The discourse on these bodies was clear, precise and often politely confrontational. It was considered an honour to be invited as a council member.

Well-functioning councils offered considered feedback and leadership to help develop new offerings, evaluate propositions and assess the quality of services delivered by the parent entity.

The unwelcome progression of advisory boards

The reason most advisory councils exist today is to guide and influence the strategy of their parent entity. Advisory councils typically have more members than advisory boards, and include critical stakeholders and thought leaders.

The often-limited commitment of advisory board volunteers, especially when addressing unwelcome challenges, can aggravate scepticism over the value of these entities.

Although advisory board members were once expected to represent the community’s interest in developing agency policies, the agency now usually selects sympathetic or favoured individuals, rather than true community advocates.

Critics are questioning whether advisory boards genuinely represent communities, or if they are just satisfying the acclaim and recognition needs of external board members?

By being an advisory board member, the individual’s social standing is undoubtedly increased, but their primary concerns more often than not are focused on avoiding rocking the boat.

Take, for example, the findings of the ‘Is Government Fit for Purpose?’ inquiry in 2018. This found that government advisory boards were considered by senior civil servants and certain ministers as being of little value.

The agenda of the chair of the departmental board, who was also secretary of state, was identified as “self-seeking”. All too often, what the secretary of state desired became the agenda of the departmental board members, often at the expense of advice offered by officials.

In exceptional circumstances, departmental board members were positioned by the secretary of state to instruct officials on the supposed “right way forward”.

Departmental board members, conscious of the chair’s often singular agenda, rarely challenged this position. To do so would offend the secretary of state and reduce board members’ chances of recognition and acclaim by government.

Getting onto the Queen’s Birthday Honours List was the most powerful, but unspoken motivation.

Special interest groups

The State of the Market 2021 report, issued by the Advisory Board Centre, captured the broad spread of advisers and interest groups that now sit on advisory boards. The report also highlighted that some 660,000 advisory boards are active globally.

Advisory board members are not legally recognised directors and do not shoulder liability or responsibilities for their decision-making advice. Instead, it appears their function increasingly is centred on promoting the image of particular members.

Another common use of advisory boards occurs when businesses use them to benefit from the knowledge and experience of others, without the obligation of remunerating full board members.

In this sense, advisory boards are becoming more project-based, sometimes lasting for as little as three to 18 months, depending on the nature of the agreed engagement.

Instead of independent opinion, advisory boards are sometimes being positioned to facilitate and subtly promote the perspective of the CEO, chair or dominant shareholder. This encourages individuals to frequently be ‘in favour’ of the chair or CEO’s views and is a powerful form of influencing.

As a result, the corporate board can become distracted from examining the issues facing the organisation. Under the guise of collegiality and freely offered advice, the CEO or chair’s perspective gradually becomes the mindset of the corporate board and C-Suite.

Unwelcome influence

In effect, the modern day advisory board is an unaccountable body which, behind the scenes, can be the most significant influencer of hidden agendas.

To confront this unwelcome trend, the chair and directors of the corporate board need to establish with the C-suite what advice is needed by who—and why? Points to consider:

• Does the advice needed warrant establishing an advisory board that meets periodically?
• Can the advice be offered by ‘expert’ individuals on an ‘as and when’ basis?
• How long should the advisory board be in place?
• Will the advice benefit one or more individuals, or the whole organisation?

Early advisory boards offered specific, clear and independent opinion. Today, they are fast being used as a vehicle for the socialisation of non-executive directors, as well as a tool for the covert pursuit of undeclared agendas.

By continuing to allow this mandate, the oversight clarity needed from corporate boards is being clouded—as advisory boards are unintentionally and progressively eroding governance and leaving the organisation vulnerable.

Andrew Kakabadse is professor of governance and leadership, and Nada Kakabadse is professor of policy, governance and ethics, both at Henley Business School.