A board of directors is an organization comprised of individuals who are responsible for the governance, control and direction of the organization. They are accountable for the legal responsibilities and accountability of a company. If they fail to perform their fiduciary duties, they may be personally responsible.

An advisory board however, is a group of people who provide guidance and mentorship on how a company should run. The advice they offer is more hands-on, and their focus tends to be on growth, development and strategy, as opposed to reporting and governance, managing risk and avoiding risk of downside.

Ideally, an organization should clearly define the purpose of its advisory board in all official documents such as meeting minutes and verbal communication in order to avoid confusion. This will ensure that they do not accidentally enter into the territory of a director’s board and could result in serious legal implications should they fail to comply with their fiduciary obligation.

In practice, the distinction is often blurred and companies may refer to their advisory www.theirboard.com/tips-for-hosting-a-successful-virtual-event/ board as “the Board.” It is recommended creating a formal statement to avoid confusion or accidental mistakes. A formal written declaration defining the role of an advisory board will help to reduce the chance of confusion for those involved. It is particularly useful when members of the advisory board may have previously been part of an executive board or are new to the company.