Boards of directors and advisory boards help an organization reach new levels. But their main distinction lies in their legal responsibilities. An advisory board serves an important function in helping the nonprofit connect with the community, offering perspective and ideas.
An advisory board doesn’t have the same legal responsibilities or fiduciary duties as a normal board of directors, which means that they are not able to make financial decisions on behalf of an organisation. This is the reason it’s crucial to ensure that both the advisory board as well as the board of directors understand the role of an advisory board and the limits of its responsibilities.
It is crucial to define what an advisory panel does by means of the written resolution of the board. This will prevent individuals who are on the board from acting like a director. This is a concern not just for legal reasons, but also because it can cause confusion and frustration for both the advisory board as well as the board of directors.
An advisory board this post that is well-established can be an important resource for nonprofit, and it is important that everyone involved knows what their role within the organization is. By ensuring there is a clear difference between an advisory board, and a regular Board to avoid confusion, avoid blunders and retain talent.
