The choice of the most effective structure for your board is a major one that has important implications. Two options that are frequently discussed are a board of directors and an advisory board. Both have distinct functions and will impact the organization in different ways. The decision of which other depends on your goals and requirements.
Advisory boards tend to be less formal than a traditional board of directors. They are also easier to establish and expand or shrink according to the needs. Advisory boards are typically established for a brief period and members are removed easily in the event of need. A board of directors is more difficult to keep and recruit, as they are legally accountable for the decisions they make.
An advisory board is a group of individuals who share advice and support but aren’t legally bound to the organization. The members of an advisory panel are an opportunity for the www.theirboard.com/whats-the-difference-between-the-board-of-directors-and-an-advisory-board/ executive team and CEO to access their expertise and experience, helping them make informed decisions that impact the business. An advisory board is an excellent tool for early stage companies as it allows for mentoring and guidance, without the burden of governance, oversight and control.
When deciding on the most suitable board for your business take into consideration how it will aid you in meeting your current business needs and develop a long-term strategy. When you are deciding on board members, look for people with diverse capabilities and expertise open to new approaches and concepts.
