I thought I'd take a moment to simply clarify the difference between Advisory Boards and Boards of Directors. People often believe they're one-in-the-same and use the terms interchangeably. In reality, they're very different entities. Both are valuable, but they wield different levels of power.

Boards of directors are typically elected by the shareholders or members. In small firms, boards of directors are usually comprised of the business' owners and family members. In larger organizations, the boards are comprised of interested individuals from disparate backgrounds and industries that – theoretically – represent the organization's customer or membership base. A board of director's responsibility is to guide the overall direction of the organization and to be the ultimate decision- making authority on strategic matters facing the organization. The company president or CEO reports to the board. The board of directors has voting power and has full authority to override the decisions of the President or CEO. The board can hire and fire key staff – including the President/CEO. A board of directors directs the actions of staff and of the organization.

Unlike their more commonly-known cousins, the boards of directors, advisory boards are typically comprised of individuals who – individually – are providing counsel to the business owner. These individuals may be attorneys, accountants, business consultants, human resources specialists, marketing professionals, etc. Each provides expertise and guidance to the business owner separately. An advisory board simply provides a way to pull these various advisors together on a monthly, quarterly, or semi-annual basis. Then, as a group, they can discuss the issues facing the company and can often determine quick solutions to strategic company issues. These advisors are not elected and they have no voting power. They are asked by the business owner to serve as a member of the advisory team. They are paid for their services on the advisory board as the board is usually a continuation of their current services. Their job is simply to advise.

I often suggest to my smaller clients that they start an advisory board when they're not yet comfortable with the idea of expanding or creating a board of directors for their company. Remember: Advisors advise – Directors direct. Determine what's right for your organization. Then let them help you lead your organization to success.

Copyright 2005 - Liz Weber of Weber Business Services, LLC.
Liz speaks, consults, and trains on Leadership Development, Strategic Planning, and Organizational Change. Additional articles can be found at http://www.wbsllc.com/leadership.shtml
Liz can be reached at liz@wbsllc.com or (717)597-8890

Permission to reprint this article is granted as long as you use the complete attribution above - including live website link and e-mail address - and you send me an email at liz@wbsllc.com to let me know where the article will be published.

Author's Bio: 

In the words of one client, "Liz Weber will help you see opportunities you never knew existed."

A sought-after consultant, speaker, and seminar/workshop presenter, Liz is known for her candor, insights, and her ability to make the complex "easy." She creates clarity for her audiences during her results-oriented presentations and training sessions.

Participants walk away from her sessions knowing how to implement the ideas she's shared not just once, but over and over to ensure continuous improvement and management growth and development.

This former Dragon Lady has been there, done it, and learned from it. Whether speaking to corporate executives or government agency personnel, Liz's comments and insights ring true.

As the President of Weber Business Services, LLC, a management consulting, training, and speaking firm headquartered near Harrisburg, PA, Liz and her team of consultants provide strategic and succession planning, management policy & systems development, employee training, as well as marketing and media outreach services.

Liz has supervised business activities in 139 countries and has consulted with organizations in over 20 countries. She has designed and facilitated conferences from Bangkok to Bonn and Tokyo to Tunis. Liz has taught for the Johns Hopkins University's Graduate School of Continuing Studies and currently teaches with the Georgetown University's Senior Executive Leadership Program.

Liz is the author of 'Leading From the Manager's Corner', and 'Don't Let 'Em Treat You Like a Girl - A Woman's Guide to Leadership Success (Tips from the Guys)'. Her 'Manager's Corner' column appears monthly in several trade publications and association newsletters.