Business Development Bank of Canada Research Study
Advisory Boards: An Untapped Resource for Businesses
Statistical analysis of businesses’ financial variables based on fiscal data from Canadian companies shows that:
- Sales growth was stronger after instituting an advisory board. In the first three years after an advisory board was set up, sales grew 66.8% compared with a growth of 22.9% in the three previous years.
- Productivity growth also strengthened after the advisory board was introduced. In the three years after the advisory board was set up, productivity rose an average of 5.9% compared with 3.2% in the previous three-year period.
The study also compares the financial performance of businesses that have advisory boards with similar companies without a board. The study shows that, from 2001 to 2011:
- On average, annual sales of businesses with an advisory board were 24% higher than those of the control group during the period.
- Productivity (as measured by the ratio of sales to the number of employees) was 18% higher on average for the group of businesses with advisory boards.
It is, therefore, not surprising that 80% of business leaders with advisory boards say that if they had to do it again, they would set up another advisory board.