While they both provide many benefits to organizations however, there are distinct distinctions between the board of directors and an advisory board. Boards are accountable for the supervision, governance and direction of an organization, while an advisory board can offer strategic business advice that are based on knowledge and experience. Additionally, a board of directors is bound by specific legal obligations that require them to comply with certain policies and guidelines unlike an advisory board that does not.
The role of an advisory board is essential when it’s created. This will help to avoid confusion and ensure that a company reaps the maximum benefit from its advisory board members. It also helps to minimize liability exposure for the advisory board and its members. It’s important to document the clarification, whether through a written contract, a resolution of the board or a corporate policy.
For instance If an organization is planning to create an advisory board for purposes of strategic planning it is beneficial to have a goal in mind. It could be as straightforward as identifying a team that an organization may find difficult to engage or as intricate as providing insight into business for an individual project.
A mix of people who are relevant to the mission of the organization should be forming an advisory board. This could include former volunteers, current board of directors members, or outside experts. When choosing members, the organization must consider the individual’s skill in the field, their industry expertise and degree of commitment to its mission. It is also crucial to determine if the member will commit to regular meetings.