A board of directors is a set of individuals responsible for management, control and direction of an organization. They are accountable for the legal obligations of a business and are held to a strict standard of accountability. If they fail to fulfill their fiduciary obligations and obligations, they could be personally liable.

An advisory board is, in contrast is a group of individuals who provide mentorship and advice on how a business should run. They provide more practical guidance and tend to concentrate on growth, strategy and www.theirboard.com/tips-for-hosting-a-successful-virtual-event/ development, rather than reporting or reporting on risk management, governance and avoiding downside risks.

Idealy, an organization should clearly define the role of its advisory board in all official documentation like meeting minutes and in the way of communication to avoid confusion. This will ensure that they do not accidentally enter into the territory of a board of director, which could have serious legal implications in the event that they fail to fulfill their fiduciary responsibilities.

In practice, the distinction is often blurred and companies may refer to their advisory board as “the Board.” It is worthwhile having it written down to avoid confusion or accidental mistakes. A formal written declaration defining the purpose of an advisory board will help to minimize the risk of confusion for those involved. This is particularly useful for those whose members of the advisory board might have been previously part of the board of directors or are new to an organisation.