Definition
An advisory board is a group of external individuals who provide expert insight, guidance, or industry perspective to a company’s leadership team. Unlike a board of directors, an advisory board has no formal authority or fiduciary responsibility — its role is to advise, not govern.
Companies form advisory boards to gain fresh thinking, test strategies, or receive mentorship from professionals with deep knowledge in a particular area.
What advisory boards do?
Advisory boards:
- Offer non-binding advice on business strategy or operational decisions
- Help executives navigate market changes or new growth areas
- Connect leadership with networks, investors, or regulators
- Share experience without the legal responsibilities of full board members
They’re especially common in startups, nonprofits, or fast-scaling companies that need outside expertise but aren’t ready for a full governance structure.
While advisory boards do not participate in formal governance, they often receive select updates, reports, or materials to review. Many organizations use board portals or similar platforms to securely share information and streamline communication with advisory members—without granting full access to sensitive board activity.
Advisory board vs. Board of directors
| Advisory Board | Board of Directors | |
|---|---|---|
| Role | Advises leadership | Governs the organization |
| Authority | Informal, non-binding | Formal, legally binding |
| Fiduciary Duty | None | Yes |
| Voting Rights | None | Can vote on decisions |
| Accountability | Advisory only | Accountable to shareholders |
Quick summary
- An advisory board gives informal guidance to company leaders
- It has no voting power or legal responsibility
- Advisory members bring industry knowledge, perspective, and connections
Related terms
- Board of directors
- Board governance
- Board meeting
- Independent director
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