The decision of choosing the most effective structure for your board is an important one with important implications. Two choices that are often discussed are boards of directors and an advisory board. Both boards serve distinct purposes and can impact the organisation in different ways. Deciding whether one or the other is right for you will come down to your goals and requirements.
Advisory boards are generally less formal than traditional boards of directors. They are also easier to establish and expand or shrink according to the needs. Advisory boards are typically created for a short period of time and members are replaced quickly if required. A board of directors, however is liable for legal responsibility for the decisions they make, which makes it more difficult to recruit and retain members.
An advisory board consists of people who provide advice and support to the company but are not legally required to do it. The members of an executive advisory board can be a valuable resource for the CEO because they can tap into their experience and expertise. This will help them make an informed decision in business. An advisory board is a fantastic instrument for early stage companies because it offers mentorship and guidance without the responsibility of oversight, governance and control.
When choosing the best board for your needs, think about whether it will meet your current requirements and develop a long-term strategy. When recruiting members, make sure you choose people with a wide range of skills and experience and who are open to new ideas and methods.