Boards of directors and advisory boards help an organization achieve new levels. But their main difference is in their legal obligations. The advisory board plays an important role in helping an organization connect with the community by providing a perspective and ideas.
A advisory board is not able to fulfill the legal obligations or fiduciary responsibilities of the regular board, which means they are not able to make financial decisions for an company. It is vital that both the advisory board and the board directors understand the function and boundaries of the advisory board.
This is particularly important if an organization commonly refers to both groups as the “board.” By establishing written clarification about the role of an advisory board – through a board resolution, for example – you can make sure that those on the advisory board do not accidentally begin acting as a board of directors. This can be a major issue not just because of liability issues but also because it could create confusion and anger among members of the advisory board and the board.
An excellent advisory board is an excellent resource for a non-profit organization, and it’s important that everyone involved knows what their role in the organization. By making sure that there is a clear difference between an advisory board, and a regular Board to avoid confusion, avoid mistakes and retain top talent.
https://theirboard.com/whats-the-difference-between-the-board-of-directors-and-an-advisory-board/