While both can help an organization reach new heights, the primary difference between a committee of directors and an advisory board is their legal obligations. An advisory board is an excellent instrument for nonprofits to connect to the community and offer their opinions and perspectives.
An advisory board doesn’t have the same legal responsibilities and fiduciary obligations as a regular board of directors, which means that they are not able to make financial decisions on behalf of an company. This is the reason it’s crucial to ensure that both the advisory board as well as the board of directors understand the role of an advisory board, and the limits of their role.
This is particularly important in the case of organizations that refer to both groups as the “board.” By https://theirboard.com/what-it-takes-to-be-an-effective-board-member/ writing down a clear explanation of what an advisory board does – through a board resolution for instance – you can make sure that the members of the advisory board do not accidentally begin acting as a board of directors. This is a concern not just because of liability issues, but also because it can create confusion and cause frustration for both the advisory board as well as the board of directors.
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 what their role in the organization. By ensuring there is a clear distinction between an advisory board and a regular Board, organizations can avoid confusion, avoid blunders and retain talent.
