There are distinct differences between a Board of Directors and an Advisory Board.
A Board of Directors is actually a legal entity that has authority while an Advisory Board has no legal responsibilities or authority. Each member of a Board of Directors has voting rights and can be liable for their company’s actions. Members of a Board of Directors can be highly compensated and require insurance for protection against lawsuits.
An Advisory Board has no authority and therefore does not require protection against lawsuits (insurance). In addition, while the members of an Advisory Board are compensated, it us usually for much less than a formal Board of Directors.
An Advisory Board can provide an excellent source of expertise and relationships that can provide outside opinions on different aspects of your business including capital raising, vendor relationships, acquisitions and dispositions, succession planning and an exit strategy.
For additional information on how to put together a highly qualified and effective Advisory Board for your family office, contact Michael Rosenblatt, President of The Quest Organization and of FON Search at 212-971-0033 or Michael@questorg.com