What does a board of advisors do ?

They are usually a small group of people (3-10) who meet periodically to advise the top management of a company/startup and help shape its direction and growth. The group is usually made up of retired executives, or people who are specialized in the business you are in or have useful contacts that may come in handy for your company. Having a well-picked board of advisors can be crucial to the growth of the company, as well as for the securing of funds. Note, advisors have neither voting rights nor legal responsibilities towards the company.

They usually get paid. A straightforward way to calculate how much they get paid, is to calculate the amount of time they spend in their periodic meetings + travel time and multiply that by an hourly salary of a CEO.

Desiree, I love how you are answering your own questions :)

I just wanted to add that for start ups I think the board of advisors act a little differently than in a more established company, which is what I think your answer is more relevant for.

I believe an entrepreneur should be creative and value-creating. Meaning, I don't think an entrepreneur should ever pay for a board of advisors, at least not until the company is making big profits. I believe you can attract a board simply by convincing them in your idea. As Desiree said, the advisors are usually very experience or retired execs, so if you find someone who is passionate about your idea, they will help you for free (this is what we did).

I also want to add another valuable reason to add advisors: credibility. As entrepreneurs we generally do not have the credibility necessary to sell our products/services on our own. But, if we add the names of HBS professors or experts in the field, we gain that added push of credibility with the client. This worked extremely well with us.