If you’re looking to grow your business and you want someone more experienced to help you navigate building a growth company, it’s a good idea to consider bringing on a board advisor.
This is especially important for first time entrepreneurs who don’t have much experience with running a big organisation, but find themselves running one due to rapid growth.
But how can you agree on exactly what the board advisor will bring to the table?
A Board Advisor Agreement can help.
What Is A Board Advisor?
A board advisor is a person with expertise or knowledge about a specific industry. As a business, you can engage a board advisor to give you advice on management and strategies to grow your business.
They can generally help you build a company with the right foundations so that it doesn’t break at scale.
What Is A Board Advisor Agreement?
A Board Advisor Agreement is important to have in place when your business brings on a board advisor. It should set out the responsibilities of the advisor, as well as any rights that they may have.
Why Do I Need A Board Advisor Agreement?
If you’re appointing a board advisor, you’ll want to have a Board Advisor Agreement in place.
This is because board advisors are generally not governed by any other law or document. To avoid any confusion or misunderstanding between your business and the advisor, it should say exactly what the terms of their engagement are.
This will ensure your advisor commits to what is expected of them, especially considering the value they provide to your business, including benefits such as a professional network and expertise.
The Board Advisor Agreement will also help protect your businesses’ intellectual property and any confidential information.
It is also important to ensure that your business has the proper governance to deal with any conflicts of interest if they arise. This is particularly important if they’re not appointed as directors of the board, as they will not be subject to the same director duties under the Corporations Act.
The Board Advisor Agreement will also clarify the relationship between your business and the board advisor to protect the interests of both parties.
Especially if you’re giving equity in exchange for their services, it is crucial to have clauses to protect your company and ensure you don’t give away too much equity.
In our Board Advisor Agreement package, we’ll start with a phone consultation with one of our lawyers who take your instructions, advise your business on any legal issues of importance, and answer any questions you have about the Board Advisor Agreement.
This will ensure that our lawyers will draft the agreement tailored to the requirements of your business.
The Board Advisor Agreement will typically include clauses such as:
- The scope of advisor’s role, expectations, and responsibilities
- Performance standards for the advisor
- Remuneration, including equity
- Reimbursement of expenses
- Intellectual property and confidential information
- Term and termination
- Warranties and indemnities.
If you’re ready to get a Board Advisor Agreement drafted for your business, Sprintlaw has friendly and experienced lawyers that can help you through the legal processes involved!
If you would like a consultation on your options going forward, you can reach us at 1800 730 617 or email@example.com for a free, no-obligations chat.
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