Board of Directors Vs Advisory Board

While both can help an organization to reach new heights, the main difference between a committee of directors and an advisory board is their legal obligations. An advisory board can be a useful instrument for nonprofits to connect with the community by offering their ideas and perspectives.

An advisory board doesn’t have the same legal obligations and fiduciary responsibilities as a regular board of directors, which means they don’t make financial decisions on behalf of an organisation. This is the reason it’s crucial to ensure that both the advisory board and the board of directors are aware of the purpose of an advisory board as well as the limitations of its responsibilities.

This is particularly crucial if an organization www.theirboard.com/what-it-takes-to-be-an-effective-board-member/ commonly refers to both groups as the “board.” By writing down a clear explanation of what an advisory board does – through a board resolution, for example – you can ensure that individuals on the advisory board aren’t swayed into acting like a board directors. This is a problem not just because of liability issues, but also because it could create confusion and cause frustration for both the advisory board as well as the board of directors.

An advisory board that is well-established can be an important resource for non-profit, and it’s vital that everyone on the board understands what their role in the organization. By ensuring that there is a clear difference between an advisory board, and a regular Board, organizations can avoid confusion, avoid blunders and retain the best talent.