www.theirboard.com/what-it-takes-to-be-an-effective-board-member/
A board of directors is a group of individuals who are responsible for the governance, control and direction of an organisation. They are accountable for the legal responsibilities and accountability of the company. If they fail in their obligations to their fiduciary obligations, they may be personally held accountable.
An advisory board, on the other hand is a group of individuals who offer advice and mentorship on how a company should be run. They offer more direct advice and tend to focus on growth, strategy and development instead of reporting, risk management, governance and avoiding downside risks.
Ideally, an organisation should establish specific guidelines for the duties of their advisory committee – not just in official documents such as meeting minutes but also in all communication with the board to avoid confusion. This will ensure that they do not accidentally enter into the territory of a board of director which could result in grave legal implications should they fail to comply with their fiduciary obligations.
This distinction is somewhat blurred in the real world in some instances, where organizations refer to their advisory boards as “the board.” It’s important to write this in writing, both for the sake of clarity and to avoid accidental missteps. A formal written declaration that defines the role of an advisory committee can help to minimise confusion among those involved. This is especially beneficial when members of the board were previously part of the board or are new to the organization.
