Advisory Board Agreement — Template & Guide

An advisory board agreement — sometimes called an advisor agreement or board member contract — is the short document that turns a handshake into a working relationship. It protects both sides: the founder gets clarity on scope and IP, the advisor gets clarity on time, pay, and exit. This guide walks through what belongs in it and gives you a template to adapt.

When you need one

Any advisory relationship that lasts more than a couple of conversations, involves confidential information, or includes any form of compensation (cash, equity, or both) should be papered. A one-page agreement is enough for most SME advisory seats — you do not need a 20-page consulting contract.

Clauses that matter

1. Parties and role

Name the company and the advisor. State the role plainly: “Advisor to the CEO on go-to-market and pricing” is better than “Member of the Advisory Board.” If there is a formal Advisory Board with other members and a chair, say so.

2. Scope of services

Two or three bullet points describing what the advisor will actually do — monthly one-hour session with the CEO, quarterly review of the sales pipeline, warm introductions where relevant. Explicitly exclude anything you do not want to be on the hook for (operational execution, signing legal documents, representing the company externally without prior consent).

3. Time commitment

A number of hours per month (typical range: 2–8) and a cadence. Vague “as needed” language is the single biggest source of advisor-founder friction — pin it down.

4. Term and termination

Most advisor agreements run for 12 or 24 months, renewable. Either side should be able to terminate with 30 days’ notice, and immediately for breach. Address what happens to unvested equity on termination (usually: it stops vesting; already-vested equity is kept).

5. Compensation

Cash retainer. £1–5k per month is a common SME range; state currency, payment day, and whether VAT is included.
Equity. Typically 0.25–1.0% for early-stage companies, vesting monthly over 24–48 months, with a short cliff (3 or 6 months) or no cliff. Reference the specific instrument (stock options, RSUs, growth shares) and its plan document.
Expenses. Pre-approved travel and out-of-pocket costs are reimbursable; day-to-day home-office costs are not.

6. Confidentiality

A mutual confidentiality clause covering everything the advisor learns about the company, its customers, its financials, and its plans. The obligation should survive termination — three to five years is standard.

7. Intellectual property

Any work product created specifically for the company (a pricing model, a hiring scorecard, a board deck) belongs to the company. The advisor keeps their pre-existing methods, frameworks, and general know-how. Say this plainly so there is no ambiguity later.

8. Non-solicitation and conflicts

A short clause preventing the advisor from actively soliciting the company’s employees or customers during the term and for 6–12 months after. Do not attempt broad non-competes — they are usually unenforceable and always unpopular. Instead, require the advisor to disclose material conflicts (directly competing engagements) and let the company decide.

9. Independent contractor

The advisor is an independent contractor, not an employee or director. They are responsible for their own taxes and cannot bind the company.

10. Governing law and disputes

Pick a jurisdiction (usually the company’s) and a forum for disputes. For low-value SME advisory relationships, this rarely matters in practice, but leaving it out invites arguments.

A working template

Adapt this one-page template to your situation. It is not legal advice; have a lawyer review before signing anything material, especially the equity clause.

ADVISORY BOARD AGREEMENT

Between: [Company Name] ("Company"), of [address]
And:     [Advisor Name] ("Advisor"), of [address]
Date:    [Effective date]

1. Role
   Advisor will serve as an advisor to the Company on [subject-matter areas,
   e.g. go-to-market and pricing], reporting to [CEO / named executive].

2. Services
   Advisor will:
   (a) attend a monthly one-hour session with the CEO;
   (b) provide written feedback on [named artefacts] on request;
   (c) make warm introductions where relevant and appropriate.
   Advisor will not act on behalf of the Company externally without prior
   written consent.

3. Time commitment
   Approximately [4] hours per calendar month.

4. Term
   This agreement runs for [24] months from the date above and renews for
   successive 12-month terms unless either party gives 30 days' written
   notice of non-renewal. Either party may terminate on 30 days' notice
   for any reason, and immediately for material breach.

5. Compensation
   (a) Cash: The Company will pay Advisor [£/€/$][amount] per month,
       invoiced monthly, payable within 14 days.
   (b) Equity: The Company will grant Advisor [0.5]% of its fully-diluted
       equity, in the form of [stock options / growth shares] under the
       Company's [named plan], vesting monthly over [36] months with
       [no cliff / a 3-month cliff]. On termination, unvested equity ceases
       to vest; vested equity is retained subject to the plan.
   (c) Expenses: Pre-approved travel and out-of-pocket expenses are
       reimbursed at cost.

6. Confidentiality
   Advisor will keep Company information confidential during the term and
   for 3 years thereafter, and will use it only for the purpose of
   providing the services.

7. Intellectual property
   Work product created specifically for the Company under this agreement
   is owned by the Company. Advisor retains ownership of pre-existing
   methods, frameworks, and general know-how.

8. Non-solicitation and conflicts
   During the term and for 12 months after, Advisor will not actively
   solicit the Company's employees or customers. Advisor will disclose in
   writing any advisory or employment role with a directly competing
   business.

9. Independent contractor
   Advisor is an independent contractor. Nothing in this agreement creates
   an employment, partnership, or agency relationship, and Advisor has no
   authority to bind the Company.

10. Governing law
    This agreement is governed by the laws of [jurisdiction]. The courts
    of [jurisdiction] have exclusive jurisdiction over any dispute.

Signed:
For the Company: ______________________   Date: _______________
Advisor:         ______________________   Date: _______________

Common mistakes

No time commitment. “As needed” means different things to founder and advisor. Pin down hours.
Equity with no vesting. Fully-vested equity on day one removes every incentive to keep showing up. Always vest.
Broad non-competes. Usually unenforceable, always unpopular. Use non-solicitation and conflict disclosure instead.
No IP clause. If the advisor builds something material for the company, both sides need to know who owns it.