Business owners sometimes need to decide on unfamiliar issues: structuring sales, preparing expansion, financing growth or planning succession. An advisory board brings together a few experienced people to examine these decisions with greater perspective.
Its value does not come from prestigious names. It comes from the quality of the questions, members’ relevant experience and follow-up on decisions. It needs a precise mandate, sufficient information and a clear boundary with those legally responsible for managing the business.
This article explains how to establish an advisory board for a Swiss SME or start-up, define its role, organise meetings and assess its usefulness. The budgets illustrate a calculation method; they are not market rates.
At a glance
- An advisory board recommends; the competent corporate bodies retain their decisions and responsibilities.
- Define the mandate, skills, remuneration and confidentiality rules before starting.
- An advisory role does not exclude all liability: the contract and actual functions matter.
What is an advisory board?
An advisory board is a group advising a business or its leaders on defined questions. Establishing one is voluntary. It can bring together commercial, industry, financial, technical or organisational expertise.
In a purely advisory role, it provides observations and recommendations. Its name alone does not place it in the position of the statutory board of directors, managing directors or executive management. Decisions remain with the competent bodies and people.
A member may also be a shareholder, service provider or statutory director. Distinguish these roles: their rights and responsibilities do not all arise from advisory board membership.
What it can contribute
The board can test project assumptions, identify overlooked risks, compare options, structure decisions and facilitate relevant introductions. It can also encourage owners to prepare their figures and explain their choices.
It does not automatically implement recommendations. If you expect a member to recruit, negotiate, prospect or install a system, define a separate operational assignment with resources and responsibilities.
Advisory boards, directors and shareholders: the differences
| Function | Main role | Powers and duties |
|---|---|---|
| Advisory board | Provide expertise and recommendations | Depend on the mandate and actual actions |
| Board of directors of an SA/AG | Perform the board’s statutory and legal functions | Duties and liability set out particularly in the Code of Obligations |
| Managing directors of a Sàrl/GmbH | Manage according to the company’s organisation | Powers and duties specific to the Sàrl/GmbH |
| Executive management | Run operations within delegated authority | Powers, duties and responsibilities attached to the role |
| Shareholder or member | Own an interest and exercise associated rights | Ownership rights, possible obligations and agreements between owners |
| Consultant | Carry out a defined assignment | Contractual obligations relating to the service |
In an SA/AG, Article 716a of the Swiss Code of Obligations reserves non-transferable and inalienable duties to the board of directors, including overall direction, organisation and ultimate supervision. Using an advisory board does not remove them.
For a Sàrl/GmbH, assess management arrangements under the rules for that legal form. Calling a group a “board” does not automatically give it the powers of a statutory corporate body.
If the main question concerns ownership and decision-making among founders, choosing business partners and their agreements also matters. An advisory board is no substitute for a poorly defined partnership.
When is an advisory board useful?
It becomes useful when significant decisions recur over time and need complementary perspectives. Examples include an SME developing sales, a family business preparing a transition or a start-up testing its offer against experienced industry buyers.
It can also help an isolated owner examine assumptions without immediately changing ownership.
Conditions for success
The owner must be willing to share information, hear objections and explain what happened to recommendations. Members need real preparation time, proportionate access to data and enough understanding of the business.
If all decisions are already made and the board merely endorses them, its value will be limited. The same applies when meetings only present results without a question to resolve.
When is another arrangement better?
A specific, one-off question may be better addressed through a consulting assignment. A lack of daily execution may require recruitment or organisational support. Statutory duties require the appropriate corporate governance arrangements.
An advisory board should not become a way of asking several experts to fill an unpaid operational position. Clarify the need before choosing the format.
Define the mandate before recruiting members
Write down the decisions on which you want support over the next six to twelve months. Use this list to select profiles and prepare meetings.
For example: “The board helps management select an export market, examine launch economics and assess proposed partners. It makes recommendations. Management and the competent corporate bodies retain their decisions and responsibilities.”
This defines the expected work more precisely than “help us grow the business”.
What to document
- The board’s objective and topics covered.
- The person or body receiving recommendations.
- No decision-making or representative powers unless separately and expressly granted.
- Composition, appointment duration and renewal arrangements.
- Meeting frequency, preparation and availability between sessions.
- Documents supplied and confidentiality rules.
- Remuneration, expenses and additional assignments.
- Conflicts of interest and termination.
The framework must match actual practice. A clause saying “advisory role” is insufficient if members actually direct teams or impose management decisions.
Assign responsibility for running the board
The owner or a designated person prepares the schedule, gathers information, frames questions and tracks decisions. A member may chair discussions so the owner does not have to lead every exchange.
Facilitation grants no additional legal power. Its purpose is to surface useful disagreement, manage time and clarify recommendations.
Choose complementary, available members
Start with the skills needed, then look for people. A business structuring B2B sales needs experience of buying processes and business development, not just an impressive contact list.
For a small SME, two to four external members may be enough initially. This practical recommendation supports discussion and limits administration. The right size depends on the mandate, availability and budget.
| Selection criterion | Question to ask |
|---|---|
| Relevant experience | Have you dealt with a comparable situation? |
| Analytical ability | How do you examine an assumption before advising? |
| Availability | How much time can you commit to preparation and meetings? |
| Independent judgement | Can you challenge the owner constructively? |
| Potential conflicts | What activities or investments could create a conflict? |
| Cooperation | Can you listen to different views and work in a group? |
Test the relationship before a long commitment
Discuss a real problem using non-sensitive information or appropriate safeguards. Observe how the person asks questions, acknowledges uncertainty and distinguishes strategic advice from execution.
An immediate answer on every subject is not necessarily a good sign. A useful member asks for missing data and explains the conditions underpinning their opinion.
Preserve different perspectives
Avoid a group made up solely of close contacts with similar experience. Seek complementary perspectives relevant to the mandate: buyers, operators, finance, technology or market development.
Do not make the group so diverse in focus that nobody understands the central issue. Each person should know why they are there and what contribution is expected.
Keep the advisory mandate separate from an employment role or ownership decision. Our articles on recruitment and choosing a business partner explain those different commitments.
Address liability, confidentiality and conflicts
Advisory does not mean free from liability
An adviser may incur contractual liability depending on the relationship and any breach. Where the relationship is a mandate, Article 398 CO addresses the agent’s responsibility for proper and faithful performance.
Article 754 CO also concerns board members and those involved in managing or liquidating an SA/AG. Someone actually performing management functions cannot rely solely on the “advisory board” label to exclude liability. Classification depends on actual duties and influence, not just the contract.
Giving advice does not automatically make someone a de facto director. The key distinction is actual participation in management. Keep recommendations, decisions and execution clearly separate, and examine ambiguous situations before they become normal practice.
Protect shared information
The board may receive forecasts, margins, contracts, projects and information about customers or staff. Define what can be shared, with whom, for what purpose and with what safeguards.
A confidentiality agreement should address permitted use, recipients, exceptions, retention and treatment when the mandate ends. Share only what the issue requires. Personal data must also be handled under applicable rules.
Avoid identifiable information where aggregate figures support the same work. To examine customer departures, the board may not need every person’s identity and full file.
Manage conflicts of interest
Ask members to disclose relevant situations: a role with a competitor, an investment in a supplier, an interest in a proposed partner or transaction-related remuneration.
Use a simple procedure: disclosure, assessment, restricted document access and withdrawal from discussions where necessary. Members should not use their position to award work to their own business without transparency.
Members active in competing businesses require particular care over information exchanged. An advisory board must not become a forum for sharing commercially sensitive data between competitors.
Make remuneration understandable
Options include an expressly agreed voluntary role, a meeting fee, an annual retainer or payment for specific assignments. Match the arrangement to time, expertise and expectations.
Even for unpaid participation, document availability and obligations. Working without a fee does not mean information can be freely used or commitments have no effect.
Annual budget example
A fictional SME brings together three external members four times a year. Each spends three hours in the meeting and two hours preparing, using an agreed rate of CHF 200 per hour.
| Item | Illustrative calculation | Budget |
|---|---|---|
| External members | 3 × 4 × 5 hours × CHF 200 | CHF 12,000 |
| Internal organisation | 4 × 6 hours × CHF 100 | CHF 2,400 |
| Travel and meeting expenses | Budget assumption | CHF 1,000 |
| Annual economic cost | Total | CHF 15,400 |
This illustrates a calculation method, not a recommended rate. Specify whether amounts include any VAT, which expenses are reimbursed and whether between-meeting availability is included.
Tax and social security treatment depend on the actual relationship, individual status and remuneration form. Issuing an invoice does not by itself establish social security status.
Should you offer shares or options?
Equity can align some interests but creates lasting consequences: dilution, rights, tax and exit conditions. Do not grant it merely for a prestigious name or a few introductions.
If using equity remuneration, define the instruments, vesting conditions, duration, departure arrangements and rights. Separate the advisory agreement from ownership documents. An advisory board does not require any allocation of equity.
Organise meetings that improve decisions
Each meeting should address a specific question sent early enough for preparation. Provide a short pack with essential data, options considered and what you expect from the board.
Example two-hour agenda
| Item | Indicative duration | Expected outcome |
|---|---|---|
| Follow-up on previous actions | 15 minutes | Understand progress and obstacles |
| Business update | 20 minutes | Share material changes |
| Main strategic decision | 55 minutes | Examine options and assumptions |
| Risks, objections and conditions | 20 minutes | Identify what could change the recommendation |
| Summary and next steps | 10 minutes | Assign follow-up and deadlines |
Adapt timings to your needs. Reserve time for questions that justify members’ attendance instead of reading figures already available to everyone.
Present options, not only a preferred project
Explain the problem, decision criteria and plausible options, including postponement or abandonment where relevant. Set out costs, risks and missing information.
Ask which assumptions seem weak and what information could change the recommendation. This reduces the risk of seeking only agreement in principle.
Keep an accurate record
Record recommendations, disagreements, conditions and proposed actions. Clearly distinguish the advisory board’s recommendation from the subsequent decision by the competent body.
The owner need not follow every opinion, but should explain the follow-up and reasons for choosing differently. Without feedback, members cannot improve their contribution.
Example: an advisory board for entering a foreign market
A fictional SME manufactures professional equipment and considers its first sales outside Switzerland. It appoints three people: an executive who has developed distributor networks, an operations economics specialist and someone familiar with the target buyers’ practices.
The mandate is not simply “make exporting successful”. It addresses three decisions: select an initial market, verify offer economics and assess distribution and support arrangements.
The first meeting challenges assumptions and identifies missing information. The second examines customer interviews and proposals received. The third reviews pilot costs and stopping criteria. The fourth assesses actual operations.
The board neither signs contracts nor directs teams. If a member needs to lead negotiations or perform technical work, define that assignment separately. Keep a clear record of who advises, decides and implements.
Assess usefulness and organise departures
After several meetings, examine actual contributions: corrected assumptions, better-prepared decisions, identified risks, useful contacts and completed actions. Meeting and recommendation counts alone do not demonstrate value.
Ask whether members receive the right information, discussions allow disagreement and the mandate still matches business needs. Skills essential during fundraising may become less central when industrial organisation becomes the priority.
Review or end the mandate
Provide for periodic review, a term or renewal mechanism, and the handling of documents, expenses and public references when the relationship ends. If the relationship qualifies as a mandate, Article 404 CO provides for revocation or termination at any time, with possible compensation if it ends at an inopportune moment. Draft the agreement with this rule in mind.
Remove inaccurate public references and clarify continuing obligations, particularly contractual confidentiality. A normal departure does not imply failure: business needs may have changed.
Create a board that strengthens decision-making
A useful advisory board remains proportionate to the SME: an understandable mandate, a few relevant members, prepared meetings and concrete follow-up. Preserve the distinction between advice and actual management.
Start with a defined mission and period, then assess the contribution before expanding. This creates a working arrangement whose value appears in decisions, rather than another title on the organisation chart.
Frequently asked questions
Is an advisory board compulsory in Switzerland?
No. Establishing one is voluntary. It does not replace the corporate bodies required by the business’s legal form or their legal powers. Define its role consistently with the existing organisation.
Can advisory board members be legally liable?
Yes, depending on their contract, breaches and actual functions. An advisory role does not provide immunity. Effective participation in management may also raise liability associated with that activity.
How many members do you need?
There is no prescribed number for a purely advisory board. Two to four external members can be a practical starting point for a small SME. Choose the necessary skills and a group size you can manage effectively.
Can you create an advisory board without giving away shares?
Yes. Members can receive meeting fees, a retainer or another agreed payment, or participate voluntarily. Equity ownership is a separate issue requiring its own terms.
How does an advisory board differ from a consultant?
A consultant generally performs a defined assignment, often with a specific deliverable. An advisory board brings several perspectives to decisions over time. A member can also perform an assignment if the two roles are clearly separated.
Should you publish members’ names on your website?
This is not necessary for the board to function. If you do, obtain agreement on names and descriptions, portray the role accurately and update the page when an appointment ends.
Sources and references
- Swiss Code of Obligations: Articles 398 and 404 on mandates; Articles 716a and 754 on duties and liability in an SA/AG; Article 810 on managing directors’ duties in a Sàrl/GmbH.
Romain Prieur is a Swiss certified public accountant and the founder of Entreprendre.ch. With more than ten years of experience in auditing and supporting businesses in Switzerland, he advises entrepreneurs on company formation, accounting and taxation.
