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updated 5/6/2013 6:19:11 AM ET 2013-05-06T10:19:11

Most entrepreneurs use the “Me, Myself and I” approach to corporate governance: I am the sole shareholder. I vote myself to be the sole board member and as a board member, I hire myself to be the CEO.

This certainly provides the ultimate in control, but entrepreneurs taking this approach are missing out on the benefits that Fortune 500 counterparts with their own boards are using to their advantage.

A board of directors serves two roles -- to legally represent the interests of shareholders (especially in public companies) and to serve as advisors to the CEO. The board in its advisory role brings a range of perspectives and skills to major business decisions. Many entrepreneurs don't use such a board because they think it's only useful for big companies or it seems too complicated to administer.

But if Warren Buffett and Steve Jobs weren't skilled enough to make decisions entirely on their own, what makes you think you are? A board of advisors can help in hearing out ideas or playing devil's advocate for key decisions. In short, they can help you make better, more effective, lower risk decisions about your business.

Here are three ways to seek out and create your own board of advisors:

Related: 3 Meetings Every Business Should Have

Recruit peers. A simple and cost-effective strategy for forming a board of advisors is to look within your business community to identify other business owners whom you trust and respect. Ask them to participate in monthly or quarterly advisory board meetings for your business, and in exchange, offer to sit on their board. This ends up being an effective barter transaction.

Not only do you get the benefit of a trusted outsider's perspective, this kind of exchange will help you build familiarity with a business that is not your own. This develops your ability to see issues in an unbiased way -- a valuable skill when running your own company.

Join an advisory board program. If you have difficulty finding a group of peers with whom you'd want to swap board seats, consider joining a board of advisors membership program. Organizations like Vistage, the Entrepreneurs' Organization and the CEO Clubs of America all have board of advisor programs. Simply join one of these organizations and you will be assigned to a pre-staffed board. Most advisors are owners of other local businesses of similar size and revenue who are eager to offer and seek advice from others.

Hire experts you trust. Another approach is to find specific advisors you respect and hire them. You might seek out the best banker in town, the top tax attorney, a reputable business coach or a marketing expert. While most board seats run for one or two year terms, with paid advisors you can try them out for a few months before having them participate over longer periods of time. While this approach costs more than the others, you can custom-build your team of experts. Also, because they are all being paid cash fees, you don't have to worry about the quid pro quo of returning the favor.

I've used all three approaches to assemble a board of advisors for my own company and have been recruited via all three methods to serve on other boards. They all work. The key is to find the approach that best matches your situation and get in a place where you can start receiving valuable outside counsel as soon as possible.

Related: How to Build an Advisory Board
 

Copyright © 2013 Entrepreneur.com, Inc.

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