There are some differences between an advisory board and a board of directors in spite of the fact that both provide a great deal of value to an business. Boards are responsible to govern the direction, control and management of an organization. An advisory board can provide strategic business insights that are based on their experiences and expertise. A board of directors is bound by specific legal obligations, which require them to follow certain policies and rules. A advisory board however does not.
It is essential to clarify the purpose of an advisory board prior to making it. This will avoid confusion and ensure that a company benefits from its advisory board members. It also helps reduce liability exposure for the advisory board and its members. It’s a good idea note this clarification in some way, whether through the form of a written agreement, company policy or a resolution of the board.
For example when an organization is planning to create an advisory board for strategic board of directors vs advisory board reasons, it would be helpful to have a specific goal in mind. This could be as easy as identifying a group that an organization might find difficult to engage or as intricate as providing business insight for an individual project.
An advisory board should consist comprised of people that is relevant to the purpose of the organization. This could include former volunteers and members of the board of directors or professionals from outside. When selecting members, organizations should consider the skills of the person, their experience in their field and the level of interest in their mission. It is also essential to find out if the member can commit to attending regular meetings.