Posted by on Jul 25, 2024 in News | 0 comments

While both can help an organization reach new heights, the main difference between a board of directors and an advisory board is their legal responsibilities. The advisory board plays as a crucial role in helping a nonprofit to connect with its community, providing insight and suggestions.

An advisory board doesn’t have the same legal obligations and fiduciary duties as a normal board of directors, meaning that they are not able make financial decisions on behalf of an organisation. This is why it’s essential to ensure that both the advisory board as well as the board of directors are aware of the importance of an advisory board, and also the limits of their role.

This is particularly important when an organization refers to both groups as the “board.” By providing a written explanation of what an advisory board’s role is via a resolution of the board for instance – you can make sure that those on the advisory board do not accidentally begin acting as a board directors. This is a problem that’s not solely for liability reasons, but also because it could cause confusion and anger for both the advisory board and the board of directors.

A great advisory board is a great resource for a non-profit organization, and it’s imperative to ensure that everyone is aware of what their role is. By ensuring there is a clear distinction between an advisory board, and a regular Board organizations can avoid confusion, avoid blunders and keep talent.

theirboard.com

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