While both aid in helping an organization achieve new heights, the primary difference between a board of directors and an advisory board is their legal obligations. An advisory board is a great tool for nonprofits to communicate with the community through their perspective and ideas.
An advisory board does not have the same legal responsibilities and fiduciary duties as a regular board of directors, which means they don’t make financial decisions on behalf of an organization. This is why it’s essential to ensure that both the advisory board and the board of directors are aware of the role of an advisory board and also the limits of its role.
This is particularly crucial if an organization commonly refers to both groups as the “board.” By providing a written explanation of what an advisory board’s role is by means of a resolution on the board, for example – you can ensure that members of the advisory board aren’t swayed into acting like a board of directors. This can be a challenge and not only due to liability issues but also because it can cause confusion and annoyance between the advisory board members and the board.
An advisory board that is well-established is a great resource for a non-profit organization, and it’s essential to ensure that everyone is aware of what their role is. By making sure there’s the distinction between an advisory board and a regular board, organizations can decrease the risk of confusion, avoid potential mistakes, and retain the best talented employees.
https://theirboard.com/an-in-depth-explanation-of-data-room-providers/