How to Remove an Advisory Board Member
How to Remove an Advisory Board Member
Nobody talks about this part. Founders spend a lot of energy thinking about how to recruit advisory board members. Very few think about what happens when the relationship stops working.
That gap creates a predictable problem. When an advisory board member stops contributing, founders tend to do one of two things. They either endure a dead relationship for months or years without addressing it, or they have a poorly handled conversation that damages the relationship permanently.
There is a better way.
This post covers how to exit an advisory board member professionally, what the legal considerations look like in an Australian context and how to have the conversation without burning the relationship.
Why Advisory Relationships Fail
Before getting to the exit, it helps to understand why these relationships break down in the first place. Most advisory board relationship failures are not about incompetence or bad faith. They are about misalignment that was not caught early enough.
Common reasons advisory relationships stop working and you need to know how to remove an advisory board member include:
The advisor's circumstances changed. A new full-time role, a competing board position, a health issue or a relocation can all reduce an advisor's availability to levels that make the engagement non-functional.
The business outgrew the advisor. This is more common than founders like to admit. An advisor who was invaluable at Series Seed may not have the right experience for the challenges a business faces at Series B. The relationship is not broken. The fit has simply shifted.
Expectations were never clearly set. Founders who run informal advisory boards without documented expectations often find that their understanding of what the advisor would contribute differed significantly from the advisor's understanding. These relationships tend to drift rather than deliver.
There is a conflict of interest. The advisor has taken a role with a competitor, joined a board with conflicting obligations or has a commercial interest that creates a genuine governance problem.
The chemistry is wrong. Not every skilled advisor is the right advisor for every founder. Sometimes the relationship simply does not work at a human level, and the honest assessment is that the engagement should end.
The First Step: Honest Assessment
Before initiating any exit conversation, it is worth being honest with yourself about whether the relationship has genuinely failed or whether it can be repaired. Ask yourself:
Have you had a direct conversation with this advisor about your concerns?
Have you clearly communicated what you expected and not received?
Is the issue the advisor's performance or the structure of the engagement?
Many advisory relationships that founders describe as failing are actually under-invested relationships. The advisor has not been given enough to work with: no clear agenda, no pre-reading before meetings, no direct questions that use their expertise.
Before moving to an exit, make sure you have genuinely tried the obvious fixes.
When It Is Time to Exit
There are situations where the relationship should end regardless of whether it can be technically repaired. You should move to exit an advisory board member when:
They have not attended two or more consecutive scheduled meetings without explanation
They have taken a role or position that creates a material conflict of interest
They have breached confidentiality obligations, whether deliberately or carelessly
Their advice or conduct has created legal, reputational or commercial risk for the business
The business has evolved significantly and the advisor's domain is no longer relevant to your priorities
In these situations, a direct and professional exit is better for everyone than a prolonged semi-functional relationship.
The Legal Structure of Advisory Board Exits in Australia
Advisory board members in Australia are not employees and typically do not have the same protections. However, the exit structure depends on what documentation was put in place at the start of the engagement.
If there is a formal advisory board agreement: The agreement should specify the term of the engagement, the notice period required to terminate and what happens to equity or unvested options on termination. Follow the agreement precisely.
If equity was issued: Check whether options have vested. Options that have not yet vested should lapse on termination under a properly drafted ESOP. Issued shares that have fully vested are generally the advisor's to keep unless your shareholder agreement includes buy-back provisions or clawback clauses.
If there is no formal agreement: This is where exits become complicated. Without documentation the parties may have different expectations about notice, equity treatment and confidentiality obligations. You will still need to have the conversation, but take legal advice before you do.
Confidentiality. Even without a formal agreement, common law obligations around confidentiality apply in Australia. It is still worth asking the exiting advisor to confirm their confidentiality obligations in writing as part of the exit process.
Key legal questions to address before an exit:
Question | Why It Matters |
|---|---|
What is the notice period in the advisory agreement? | Sets the minimum timeline |
Are any equity grants unvested? | Determines what lapses on exit |
Is there a non-compete clause? | Rare for advisors but worth checking |
What IP does the advisor hold? | Ensure all work product is returned or assigned |
Is there a tax event on equity treatment? | Particularly relevant for ESS-issued options |
Taking thirty minutes with a commercial lawyer before the conversation is usually cheaper than resolving ambiguity after it.
How to Have the Conversation
Most founders dread the exit conversation far more than it needs to be dreaded. Advisory board relationships are professional relationships. Professionals exit professional relationships all the time without drama, provided the conversation is handled with respect and directness. The conversation should be:
Direct. Do not use vague language about "refreshing the board" or "reviewing the composition" as a way to avoid stating what is happening. The advisor will know. Vagueness makes it worse.
Honest about the reason. You do not owe a detailed explanation, but you owe a truthful one. "The business has moved into a phase where we need different expertise" is honest. "We are taking the board in a new direction" is a euphemism that serves no one.
Clear about the process. Explain the notice period, when their last formal engagement will be and how any equity or outstanding fees will be handled.
Gracious. Even a relationship that has not delivered what you hoped can end with genuine acknowledgment of what the advisor contributed. If they contributed nothing, you can still be professional.
A good framework for the conversation:
Acknowledge what the advisor has contributed
Be honest about the reason for the exit
State clearly what the next steps are
Thank them for the engagement
The whole conversation should take fifteen to twenty minutes. It does not need to be a long dialogue.
Common Mistakes Founders Make
Waiting too long. The longer a non-functional advisory relationship runs, the more awkward the eventual exit becomes. Address it early.
Doing it over email. An email is not the right format for ending a professional relationship. A direct conversation, followed by a confirming email, is the right sequence.
Over-explaining. Founders often over-justify the exit out of guilt or anxiety. A clear and honest reason is enough. A three-paragraph explanation of everything that went wrong is not.
Ghosting. Stopping to invite an advisor to meetings without ever having the direct conversation is not an exit. It is avoidance. It leaves the advisor uncertain about their status and creates reputational risk for the founder.
Getting the equity treatment wrong. Issuing equity to an advisor and then failing to follow the vesting and lapse provisions correctly on exit creates a messy cap table and potential legal exposure. This is the area where taking proper advice matters most.
Protecting the Relationship
Many founders discover that well-handled advisory exits lead to better long-term relationships than the advisory engagement itself produced. When you treat an advisor with respect and directness through an exit, you signal that you are a professional worth staying connected with. Former advisors who were exited well often:
Continue to refer clients, partners or future advisors
Provide references when the founder is raising capital
Re-engage in a different capacity when the timing is right
Speak positively about the founder and the business in market
The goal is not just to end the formal engagement. The goal is to end it in a way that preserves the relationship for the long term.
One Last Thought
Advisory boards only create value when the relationships are real and the conversations are honest.
Keeping an advisor on the board out of politeness or reluctance to have a difficult conversation is a form of strategic self-deception. It fills a seat that could be occupied by someone who would actually move the business forward.
The best advisory boards I have seen are ones where the chair and founder are willing to make hard calls when the composition needs to change. That discipline is what separates advisory boards that deliver from ones that simply exist.
Need Help Managing Your Advisory Board?
I chair and advise advisory boards for founders and leadership teams across Australia. If you are navigating a board composition change or building a new advisory structure from scratch, get in touch.
