A board of directors is an organisation composed of people who are responsible for the management, control, and direction of that organization. They oversee the legal responsibilities of a company and are held to a high standard of accountability. This means that if they fail to meet their fiduciary duty they could be personally liable.
An advisory board, on the other hand is a group of people who provide guidance and mentorship on how a business should be run. They provide more practical guidance and tend to concentrate on growth, strategy and development, rather than reporting or reporting on risk management, governance and avoiding risks that could be detrimental to the business.
Idealy, an organization should clearly define the purpose of its advisory board in all official documents such as meeting minutes and the way of communication to avoid confusion. This will ensure that they board management software don’t accidentally get into the realm of a director’s board, which could have serious legal consequences should they fail to comply with their fiduciary responsibilities.
This distinction can be a bit ambiguous in real life and some organizations refer to their advisory boards as “the board.” It’s worth putting this in writing in order to have a sense of clarity and to avoid mistaken assumptions. A formal written declaration that defines the function of an advisory committee can reduce confusion among the people involved. This is particularly helpful when members of the board have previously served on the board or have just joined to the organization.