Board of Directors Vs Advisory Board

While both help an organization achieve new heights, the main distinction between a board of directors and an advisory board is their legal obligations. An advisory board can be a useful tool for nonprofits to communicate to the community and offer their ideas and perspectives.

A board of advisors is not able to fulfill the legal duties or fiduciary obligations as the regular board, which means they are not able to make financial decisions for an company. It is essential that both the advisory and directors of the board know the role and responsibilities of the advisory board.

This is particularly crucial in cases where an organization typically refers to both groups as the “board.” By creating a written explanation of what an advisory committee does by means of a resolution on the board, for example – you can make sure that those on the advisory board don’t accidentally start acting like a board directors. This is a problem not solely for liability reasons, but also because it could cause confusion and anger for both the advisory board as well as the board of directors.

An advisory board that is well-established can be a valuable resource for a nonprofit, and it is important that everyone involved knows what their role in the organization. By ensuring there is a clear difference between an advisory board and a regular Board Organizations can avoid confusion, avoid missteps and retain talent.

https://theirboard.com/what-it-takes-to-be-an-effective-board-member/