Both boards of directors and advisory boards help an organization reach new heights. However, their primary difference lies in their legal obligations. An advisory board is a great tool for nonprofits to communicate with the community through their opinions and perspectives.
An advisory board doesn’t have the same legal responsibilities or fiduciary duties as a normal board of directors, which means that they are not able to make financial decisions on behalf of an organization. This is why it’s vital to ensure that both the advisory board and board of directors are aware of the role of an advisory board, and the limits of their https://theirboard.com/ role.
This is particularly crucial in the case of organizations that refer to both groups as the “board.” By providing a written explanation of what an advisory board’s role is – through a board resolution for instance – you can make sure that those on the advisory board aren’t swayed into acting as a board of directors. This can be a challenge not just due to concerns about liability, but also because it can create confusion and anger between the advisory board members and the board.
An advisory board that is well-established can be a valuable source for a non-profit organisation, and it’s essential to ensure that everyone is aware of what their role is. By ensuring that there’s clearly defined distinction between an advisory board and a regular board, organizations can lessen the chance of confusion, avoid potential mistakes, and also retain top talented employees.
