Boards of directors and advisory boards assist organizations reach new heights. But their main difference lies in the legal responsibilities they have. An advisory board is a great way for nonprofits to interact with the community through their perspective and ideas.
A advisory board is not able to fulfill the legal duties or fiduciary obligations of the regular board, which means they cannot make financial decisions for an organization. It is crucial that both advisory and directors of the board know the function and boundaries of the advisory board.
It is important to clarify what an advisory panel does by drafting a written board resolution. This will stop individuals on the board from accidentally acting as directors. This is a problem that’s not solely for liability reasons, but also because it can cause confusion and frustration to https://theirboard.com/whats-the-difference-between-the-board-of-directors-and-an-advisory-board/ both the advisory board as well as the board of directors.
A great advisory board can be a valuable source for a non-profit organisation, and it’s essential that everyone involved understands what their role is. By ensuring there is a clear difference between an advisory board, and a regular Board Organizations can be clear, avoid misunderstandings, and retain talent.