Board of Directors Vs Advisory Board

28 Jul Board of Directors Vs Advisory Board

While both help organizations reach new heights, the primary difference between a board of directors and an advisory board is their legal obligations. The advisory board plays an important function in helping a nonprofit to establish relationships with the community, offering perspective and suggestions.

An advisory board doesn’t have the same legal obligations and fiduciary obligations as a regular board of directors, which means they do not make financial decisions on behalf of an organization. It is crucial that both advisory and directors of the board are aware of the function and boundaries of the advisory board.

This is especially crucial when an organization refers to both groups as the “board.” By creating a written explanation of what an advisory board’s role is by means of a resolution on the board for instance – you can ensure that those on the advisory board don’t accidentally start acting like a board directors. This could be a problem and not only due to liability issues but also because it can cause confusion and frustration among members of the advisory board and the board.

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 within the organization is. By ensuring clearly defined distinction between an advisory board and a regular board, organizations can lessen the risk of confusion, avoid potential mistakes, and keep the best talented employees.

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