Boards of directors and advisory boards aid in helping an organization achieve new heights. Their primary difference is in the legal responsibilities they have. A board of advisors plays as a crucial role in helping organizations connect with the community by providing a perspective and suggestions.
An advisory board does not have the same legal responsibilities or fiduciary duties as a regular board of directors, meaning that they are not able make financial decisions on behalf of an organisation. It is important that both advisory and the board directors understand the purpose and limitations of the advisory board.
It is crucial to define the role of an advisory panel by means of writing a board resolution. This will stop people on the advisory board from acting as a director. This can be a problem and not only due to concerns about liability, but also because it could cause confusion and anger among the advisory board members and the board.
An advisory board that is well-established can be an invaluable resource for a non-profit, and it’s vital that everyone on the board understands find more information what their role within the organization is. By ensuring the distinction between an advisory board and a regular board, organizations can decrease the risk of confusion, avoid potential missteps, and retain talent.