15 Mar Do advisory boards have a hidden agenda?

The early advisory boards offered specific, clear and independent opinion. Today they can be vehicles for personal advancement and covert agendas, say Henley Business School governance and leadership professors, Nada and Andrew Kakabadse.

Advisory boards have 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 has been 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? So what’s behind this overnight success?

Who gains?

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. This was the result of a legal requirement with particular relevance to local anti-poverty programmes.

Federal legislation required citizen participation in transportation, urban planning, energy adoption and distribution, education and social services programmes.

The effectiveness of these advisory boards was viewed positively by some, while seen by others as an overbearing form of citizen oversight.

However, 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.

Examples of this included:

• The National Research Council’ Science Advisory Board (SAB), 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
• The Anglo-Russian Joint Advisory Council to the Trades Union Congress, established in the UK between 1924 and 1936 as one of the first independent advisory councils
• UK Advisory Council on National Records and Archives, established in 1958 by the Public Records Act to advise the Secretary of State for Digital, Culture, Media and Sport 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 unwelcome progression of advisory boards

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

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 individuals’ social standing is undoubtedly increased, but their primary concerns more often or 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.

An unaccountable body

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 needs 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 a ‘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.