Board of Directors Vs Advisory Board

There are a few differences between an advisory board and a board of directors and a board of directors, even though each provide significant value to an organization. Boards are accountable for governance, control and direction of an organization while an advisory board can provide business-related strategic insights based on experience and expertise. A board of directors is bound by certain legal obligations that require them to follow certain guidelines and policies. An advisory board on the other hand is not.

It’s essential to clarify the purpose of an advisory panel when creating it. This will avoid confusion and ensure that a company benefits from its advisory board members. It also helps to reduce the risk of liability for the advisory board and its members. It’s important to document the clarification, whether through a written agreement, a board resolution or a corporate policy.

It is useful to have a goal in mind when, for example, an organization is planning to establish an advisory board to serve strategic purposes. This could be as simple as identifying an audience that the company might find difficult to engage with or as complex as providing strategic business insights to a particular project.

A mix of people who are relevant to the mission of the organization ought to form an advisory panel. This might include past volunteers or board members or outside professionals. When choosing members organizations should consider the qualifications of the person, their expertise in their field and their level of commitment to their mission. Additionally, it is important to determine whether the member will commit to having regular meetings.