Sound-Up Governance

Each week, we will release two illustrated definitions of corporate governance jargon in order of increasing complexity. In this instalment we have the definition of "advisory board". Check the episode thumbnail for an illustration by Nate Schmold.

Originally published January 23, 2023

What is Sound-Up Governance?

The real impact of corporate governance isn't about compliance or structure or policies, it's about the conditions that impact decision-making. Sound-Up Governance features fresh perspectives to help boards and executives to be a bit better tomorrow than they were yesterday.

There are a lot of advantages to being the only owner and the only director of your own corporation. No matter how audacious your aspirations and ideas for Reallie Steilish might be, you don’t need anybody’s approval before just getting things done. I mean, who would know better than you if packaging all your shipments in solid gold boxes would attract the hard-to-reach ultra-high net worth Eyelash segment? Nobody! That’s who.

But sometimes it’s just too difficult or too risky to make all the decisions on your own without input from impartial experts. If only you could build a board, but not *have* to do what they tell you to do… Oh wait, I think you just solved your own problem! Why don’t you go and build a board that’s not really a board at all, but a group of smart people who give you advice but don’t have any authority?

This is a thing that lots of smart business owners do, and it’s called an “advisory board.” Some business owners like their advisory boards so much that they keep them around even if/when they have a functioning board of directors, too.