Board of Directors Vs Advisory Board

Both boards of directors and advisory boards assist an organization to reach new heights. However, their primary difference lies in the legal responsibilities they have. An advisory board is a valuable tool for nonprofits to communicate with the community through their perspective and ideas.

An advisory board does not have the same legal responsibilities and fiduciary duties as a normal board of directors, which means they are not able make financial decisions on behalf of an company. This is the reason it’s crucial to ensure that both the advisory board as well as the board of directors understand the role of an advisory board and also the limits of its duties.

This is especially important when an organization refers to both groups as the «board.» By establishing written clarification about what an advisory board does via a resolution of the board for instance – you can ensure that members of the advisory board don’t accidentally start acting as a board directors. This is a concern not just because of liability issues, but also because it can cause confusion and frustration for both the www.theirboard.com/what-it-takes-to-be-an-effective-board-member/ advisory board as well as the board of directors.

A well-run advisory board is a valuable resource for a non-profit organization, and it’s vital that everyone on the board understands what their role in the organization is. By ensuring that there is a clear difference between an advisory board and a regular Board to be clear, avoid misunderstandings, and retain the best talent.