A board of directors is an organisation comprised of individuals who are responsible for the governance, control, and direction of that organization. They are accountable for the legal obligations and accountability of the company. This means that if they fail fulfill their fiduciary obligation they may be personally liable.
A group of individuals who advise and guide companies is known as an advisory board. The advice they provide is more practical, and their focus tends to be on growth, development and strategy, rather than reporting governance, governance, risk management and avoiding risk of downside.
Ideally, a company should clearly define the role of its advisory board in all official documents such as meeting minutes and communications via verbal to avoid confusion. This will ensure that they don’t accidentally cross over into the territory of being a board of directors, which can result in serious legal consequences for members if they’re not meeting their fiduciary duties.
In practice, the distinction is often blurred and organizations may refer to their advisory board as “the Board.” It is recommended having it written down to avoid confusion or accidental mistakes. A formal written document that hosting a successful virtual event defines the function of an advisory board will assist in reducing confusion among those involved. This is especially beneficial when board members have been previously on the board or have just joined to the organization.