A board of directors is a group of individuals responsible https://theirboard.com/document-management-systems-key-to-efficient-digital-data-spaces/ for governance, control and direction of an organization. They are accountable for the legal obligations and accountability of the company. This means that if they fail perform their fiduciary duties they may be personally accountable.
An advisory board is, in contrast, is a group of people who offer guidance and mentorship on how a company should be run. Their advice is more practical, and their focus is on growth, development and strategy, as opposed to reporting and governance, reducing risk and avoiding downside risk.
Ideally, an organization should outline specific guidelines for the duties of their advisory boards – 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 get into the realm of a board of directors which could result in grave legal implications if they fail to meet their fiduciary obligation.
In practice, the distinction may be blurred and organisations may refer to their advisory board as « the Board. » It is worthwhile making it clear in writing to avoid confusion and accidental mistakes. A formal written statement defining the role of an advisory board can help to minimize the risk of confusion for those involved. This is particularly helpful when members of the advisory board may be members of a board of directors, or have just joined an organization for the first time.