While both help an organization to reach new heights, the main difference between a committee of directors and an advisory board is their legal responsibilities. An advisory board is an excellent instrument for nonprofits to connect with the community by offering their perspectives and suggestions.
A advisory board is not legally bound by the duties or fiduciary obligations of an ordinary board, and therefore they are unable to make financial decisions for an organization. It is important that both the advisory board and directors of the board know the purpose and boundaries of the advisory board.
It is crucial to define what an advisory panel does, through the written resolution of the board. This will keep individuals who are on the board from acting like directors. This isn't solely for liability reasons, but also because it could cause confusion and frustration for both the advisory board and the board of directors.
An advisory board that is well-established can be an important resource for non-profit, and it's important that everyone involved knows what their role within the organization. By ensuring that there's the distinction between an advisory board and a regular board, organizations can reduce the chance of confusion, avoid potential mistakes, and keep the best talents.
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