Advisory Boards

Advisory boards, also called advisory councils or advisory committees, offer organizations regular access to individuals with specialized expertise, typically focusing on a specific domain, such as technology, sustainability, global marketing, or a particular initiative. Such boards can be useful to public and private companies, nonprofits, professional practices, and government bodies alike—at all sizes and stages of growth.

For new, small, private companies, advisory boards can be a first step in the journey toward a working fiduciary board. At the other end of the spectrum, they can be useful to large, public companies that wish to supplement the work of their existing fiduciary boards.

Unlike fiduciary boards (also called statutory boards), advisory boards do not have legal decision-making authority, so their recommendations are not binding. Instead, these groups of appointed nonfiduciary directors serve as a resource for the organization, offering expertise, insights, and timely perspectives that can help inform decisions and strategies.

Structure

Advisory boards serving corporations give advice, as their name suggests. The recipient of the advice, the company itself, can be represented by members of management, the board, or both. Reporting structures are often clarified in the advisory board’s bylaws or charters. However, because there are no legal requirements for establishing an advisory board, formal documentation for these groups varies widely in regard to scope and specifications.