A board of directors is a group of individuals read the article responsible for oversight, control and governance of an organization. They oversee the legal responsibilities of a business and are held to a high standard of accountability. If they fail to perform their fiduciary obligations, they may be personally responsible.

A group of people who advise and mentor the company is called an advisory board. They provide more direct and practical advice and tend to focus on strategy, growth and development, not reporting or reporting on risk management, governance and avoiding risks that could be detrimental to the business.

Ideally, a company should clearly define the purpose of its advisory board in all official documentation like meeting minutes and in verbal communication in order to avoid confusion. This will ensure that they don’t accidentally cross-check into the jurisdiction of a director’s board which could result in grave legal implications if they fail to meet their fiduciary responsibilities.

In the real world, this distinction may be blurred and organisations may refer to their advisory board as “the Board.” It is worth making it clear in writing to avoid any confusion or accidental mistakes. A formal written document that clarifies the role of an advisory board will reduce confusion among those involved. This is particularly helpful when members of the board have previously been part of the board or are new to the organization.