What’s the difference between an advisory board and a board of directors?

An advisory board is informal and gives greater flexibility than a board of directors. A board of directors has legal fiduciary responsibilities while an advisory board does not have authority to vote on corporate matters.

What is an advisory board?

An advisory board is a body that provides non-binding strategic advice to the management of a corporation, organization, or foundation.

What is a board of directors?

By law, every company has to have at least one director, but in many cases it is appropriate to have more than one director.

Small businesses or startups often start out having just one director. As they grow, they bring in additional talented individuals and advisers who can then become directors and help in making key strategic decisions for the company.

A board of directors is the team of legally appointed people who run the company on behalf of shareholders. They have a legal and fiduciary duty towards the company and can be held responsible where they do not exercise their duties with the necessary care and skill.