https://theirboard.com/whats-the-difference-between-the-board-of-directors-and-an-advisory-board/
The advisory board of a company can assist in meeting business requirements and establishing long-term strategies. Effective advisory board members are highly experienced who bring their expertise to your company and provide leadership. These are individuals who understand your industry and have background in professional realms like law, finance or marketing. Advisory boards are generally comprised of volunteers who want to help you. They could be currently board members or they could be recruits from outside. They meet regularly or semi-regularly, typically six to eight times per year and can also serve as mentors for the CEO and the leadership team.
In general, members of an advisory council aren’t paid for their time but they are reimbursed for the expenses of meetings. Additionally, the size of an advisory board is a matter of flexibility and makes it easy to form and expand based on the needs of the company. In addition, an advisory board can be more informal than a regular board of directors, which helps minimize the risk of liability.
It is essential for a company to set clear boundaries so that their advisory board doesn’t start acting as an advisory board and take on all the obligations that come with it. This includes writing a documented explanation of the advisory board’s duties, such as through a board resolution or in their bylaws. This will make it easier to hold them accountable and avoid confusion. As a company grows it’s not uncommon for advisory roles to be formalized and then become an entire board of directors. This transition usually occurs with acquiring investors or reaching a certain amount in operations.