Both boards of directors and advisory boards aid in helping an organization achieve new heights. However, their main difference lies in their legal responsibilities. An advisory board is a valuable way for nonprofits to interact with the community by sharing their opinions and perspectives.
An advisory board doesn’t have the same legal obligations and fiduciary obligations as a regular board of directors, meaning that they don’t make financial decisions on behalf of an organisation. It is important that both the advisory and the board directors understand the purpose and boundaries of the advisory board.
This is particularly important if an organization commonly refers to both groups as the “board.” By writing down a clear explanation of what an advisory board does via a resolution of the board for instance – you can ensure that members of the advisory board don’t accidentally begin acting like a board directors. This can be a challenge not just because of concerns about liability, but also because it can cause confusion and anger among members of the advisory board and the board.
A well-run advisory board is a valuable resource for a nonprofit, and it is crucial that everyone involved understands what their role in the organization. By making sure that there is a clear difference between an advisory board and a regular Board organizations can be clear, avoid misunderstandings, and keep talent.