Boards of directors and advisory boards help an organization to reach new levels. But their main difference lies in their legal responsibilities. An advisory board can be a useful tool for nonprofits to connect with the community by offering their ideas and perspectives.
A board of advisors is not subject to the legal duties or fiduciary find more information obligations as a regular board, so they cannot make financial decisions for an organisation. It is vital that both the advisory board and directors of the board know the function and boundaries of the advisory board.
It is important to clarify the functions of an advisory panel, through the written resolution of the board. This will keep individuals on the board from acting as directors. This is a problem that’s not solely for liability reasons, but also because it could create confusion and cause frustration for both the advisory board and the board of directors.
An advisory board that is well-established can be a valuable resource for a non-profit organization, and it’s vital that everyone on the board understands what their role within the organization is. By making sure that there is a clear difference between an advisory board and a regular Board, organizations can avoid confusion, avoid missteps and retain the best talent.