While they both provide a wealth of value for organizations, there are distinct differences between a board of directors and an advisory board. Boards are responsible to govern and direct an organization. A board of advisors can offer business-oriented strategic advice that are based on their experience and knowledge. Additionally a board of directors has specific legal obligations that require them to comply with certain rules and policies, while an advisory board does not.
The definition of the role of an advisory board is essential when it’s first established. This will avoid confusion and ensure that an organisation reaps the maximum benefit from its advisory board members. This will also help reduce the risk of liability for the members of the advisory board, and for them as well. It’s a good idea to make this clear in some manner, whether it’s the form of a written agreement, company policy or a resolution of the board.
For example when an organization is looking to establish an advisory board for strategic purposes, it would be helpful to have a clear objective in mind. This could be something as easy as identifying a group that an organization might be unable to get involved with or as complex as providing business insight for the specific project.
A mixture of people who are relevant to the goal of the organization ought to constitute an advisory board. This could include former volunteers as well as members of the board of directors, or professionals from outside. When choosing members, the organization must take into account the person’s skills in the field, their industry expertise and degree of dedication to its mission. It’s also important to find out if the member is able to commit to regular meetings.