What Your Advisory Board Agreement Should Contain
If you must have an advisory board, make sure you aim high in building it. Go for marquee names if you must, but strive for members who will really contribute - to the esprit de corps as well as everything else. And make sure they sign an agreement.
Advisory board members are not, de facto, fiduciaries of your company (although in Canada, the Supreme Court has held that a fiduciary duty can be created in pretty much any circumstance). This means that, in order to protect the assets of the company (your number one job before creating shareholder value),you need to have an agreement with your advisors that requires the advisor to do the following:
1. Agree to keep company information confidential.
2. Assign inventions, and other work product created for the Company in his/her capacity as advisor.
3. Assure the Company that acting as an advisor and entering into the agreement do not violate any other commitment of advisor – eg., no moonlighting policies or other obligations. Your Company does not want to be in aposition of having induced your advisor to breach his/her contract with her employer.
4. Require that your advisor tells you if he/she becomes involved with an overlapping or competing business. Since your advisor has other business endeavours, it would not be appropriate to ask for a non-compete from him/her; this soft provision will, however, provide some protection.