While they both provide many benefits to businesses however, there are distinct distinctions between the board of directors and an advisory board. The board is accountable for governing, control and direct an organisation. An advisory board can provide business strategies that are based upon their experience and knowledge. A board of directors is bound by specific legal obligations which require them to follow certain policies and rules. An advisory board however is not.
The purpose of an advisory board is a must when it’s formed. This will help to avoid confusion and ensure that the organization is able to get the most value from its advisory board members. This will also help minimize the liability exposure of the members of the advisory board, and their families. It’s important to document the clarification, whether through a written agreement, a resolution from the board, or a company policy.
It is helpful to have a specific goal in mind when, for example, an organization is planning to establish an advisory board for the purpose of strategic planning. This could be as simple as identifying an audience that the business might find difficult to engage with, or as complicated as providing strategic business insights for a particular project.
An advisory board should be made up of a mix of people who are relevant to the mission of the organization. This could include former volunteers, members of the board of directors or experts from outside. When selecting members, organizations should take into account the person’s skills as well as their knowledge of the industry and level of dedication to its mission. In addition, it’s crucial to determine if the member is able to commit to attending regularly.