Two Boards, Two Very Different Jobs
The word "board" gets used loosely in the nonprofit sector. An organisation might have a board of directors, an advisory board, a board of trustees, a board of governors, and a young professionals board -- all operating simultaneously. To outsiders (and sometimes to insiders), the distinctions are murky.
The confusion matters because the two primary types of boards -- governing boards and advisory boards -- have fundamentally different roles, responsibilities, and legal standing. Conflating them leads to governance failures: advisory members who think they have decision-making authority, or governing directors who treat their legal obligations as optional.
This article clarifies the differences, explains when each structure is appropriate, and provides practical guidance for nonprofits that want to use one or both effectively.
What Is a Governing Board?
A governing board (also called a board of directors, board of trustees, or management committee, depending on the jurisdiction) is the legally constituted body responsible for the governance of a nonprofit organisation. Its members are fiduciaries -- they have legal duties to act in the organisation's best interests, exercise reasonable care, and ensure compliance with applicable laws.
Key Characteristics of a Governing Board
Legal authority and accountability. The governing board is established by the organisation's constitution, charter, or articles of incorporation. Its members are legally responsible for the organisation's actions and can be held personally liable in cases of breach of duty, depending on the jurisdiction and insurance coverage.
Decision-making power. The governing board approves the budget, hires and evaluates the CEO, sets strategic direction, and makes major policy decisions. Its resolutions are binding on the organisation.
Fiduciary duties. Directors have three primary duties:
- Duty of care -- to act with the diligence and prudence that a reasonable person would exercise in similar circumstances
- Duty of loyalty -- to put the organisation's interests ahead of personal interests
- Duty of obedience -- to ensure the organisation operates within its stated mission and complies with the law
Regulatory requirements. Governing board members must typically be registered with relevant regulatory bodies (the Charity Commission, state corporate registries, etc.). Changes in board composition must be reported. Members must comply with disqualification rules and conflict of interest policies through the organisation's compliance processes.
Formal meeting procedures. Governing boards operate with formal agendas, recorded minutes, quorum requirements, and voting procedures. Decisions must be properly documented and authorised.
What a Governing Board Does
The governing board's core functions include:
- Setting the organisation's mission, vision, and strategic direction
- Approving and monitoring the annual budget and financial statements
- Appointing, supporting, and evaluating the CEO or executive director
- Ensuring legal and regulatory compliance
- Managing risk and protecting the organisation's assets
- Approving major policies, contracts, and commitments
- Ensuring accountability to stakeholders, funders, and the public
For a comprehensive overview of governing board roles and structure, see our guide on building the perfect nonprofit board.
What Is an Advisory Board?
An advisory board is an informal group of individuals who provide counsel, expertise, and connections to the organisation. Unlike a governing board, an advisory board has no legal authority, no fiduciary duties, and no decision-making power.
Key Characteristics of an Advisory Board
No legal standing. Advisory boards are not established by the organisation's governing documents and are not recognised by regulators. Their members are not directors in any legal sense.
No decision-making authority. Advisory board members offer advice and recommendations. The governing board and executive team are free to accept, modify, or ignore that advice. Advisory members do not vote on organisational decisions.
No fiduciary duties. Because they have no legal authority, advisory board members do not carry fiduciary obligations. They cannot be held liable for the organisation's actions or decisions.
Flexible structure. Advisory boards can be as formal or informal as the organisation wishes. They can meet regularly or ad hoc. They can have term limits or serve indefinitely. Their structure is entirely at the organisation's discretion.
Specialised focus. Advisory boards are often organised around specific areas of expertise -- a medical advisory board, a technology advisory board, a community advisory board, or a fundraising advisory board. This focus allows the organisation to draw on deep expertise without the overhead of a full governing board.
What an Advisory Board Does
Advisory boards typically contribute by:
- Providing expert advice on specific topics (technology strategy, clinical practice, legal issues, etc.)
- Extending the organisation's network and making introductions to donors, partners, and other stakeholders
- Lending credibility and reputation to the organisation
- Offering a sounding board for the CEO or executive team on strategic issues
- Advocating for the organisation's mission in their professional and personal circles
- Providing industry-specific insights that the governing board may lack
The Critical Differences at a Glance
| Feature | Governing Board | Advisory Board | |---|---|---| | Legal authority | Yes -- established by governing documents | No -- informal, discretionary | | Fiduciary duties | Yes -- duty of care, loyalty, obedience | No | | Decision-making power | Yes -- resolutions are binding | No -- recommendations only | | Personal liability | Yes -- members can be held liable | No (in most circumstances) | | Regulatory reporting | Yes -- changes must be reported | No | | Meeting formality | Formal agendas, minutes, quorum rules | Flexible, at organisation's discretion | | Member selection | Governed by constitution/bylaws | At organisation's discretion | | Term limits | Often required by governing documents | Optional | | Financial oversight | Required -- budget approval, audit oversight | None | | CEO oversight | Required -- appointment, evaluation, termination | None |
When to Use a Governing Board
Every incorporated nonprofit must have a governing board. There is no choice about whether to have one -- the question is how to structure it effectively.
The governing board should be:
- Large enough to bring diverse skills and perspectives (typically seven to fifteen members for most organisations)
- Small enough to make decisions efficiently (boards larger than fifteen often struggle with meaningful discussion)
- Composed of members with the collective skills, experience, and diversity to govern the organisation effectively
- Supported by clear processes for meetings, decision-making, and accountability
For guidance on composing an effective governing board, see our articles on how to recruit board members and the board skills matrix template.
When to Use an Advisory Board
An advisory board is optional but can be highly valuable in specific circumstances:
When You Need Expertise the Governing Board Lacks
Your governing board may not have specialists in every area the organisation touches. A healthcare nonprofit, for example, might need clinical expertise that its governance-focused board does not possess. A technology advisory board can guide digital strategy without adding non-governance specialists to the governing board.
When You Want to Engage Major Donors or Influencers
Some donors and community leaders want to be connected to your organisation but are unable or unwilling to take on the legal responsibilities of a governing director. An advisory board provides a prestigious affiliation without fiduciary obligations.
When You Need Community Input
A community advisory board composed of service users, residents, or beneficiaries provides invaluable grassroots perspective. This is particularly important for organisations that serve specific populations -- the advisory board ensures those voices are heard in governance discussions, even if the advisory members are not part of the formal governance structure.
When You Are Growing Rapidly
Fast-growing organisations often need more advice than their governing board can provide. An advisory board can supplement the governing board's capacity during periods of rapid change without the complexity of expanding the formal governance structure.
When You Want to Develop Future Board Members
An advisory board can serve as a training ground for future governing directors. Members who demonstrate commitment, judgment, and reliability on the advisory board may be invited to join the governing board when vacancies arise. This gives both parties a chance to assess the fit before making a formal governance commitment.
Structuring an Advisory Board Effectively
If you decide to create an advisory board, invest time in getting the structure right. An advisory board that is poorly managed can create confusion, liability, and frustration.
Define the Purpose Clearly
Document why the advisory board exists and what it is expected to contribute. Is it providing technical expertise? Fundraising connections? Community perspectives? Strategic advice? The clearer the purpose, the easier it is to recruit the right members and set appropriate expectations.
Create Terms of Reference
Even though an advisory board is informal, it benefits from written terms of reference that cover:
- The advisory board's purpose and scope
- How members are selected and how long they serve
- How often the advisory board meets
- How it communicates with the governing board and the executive team
- What (if any) confidentiality obligations apply
- An explicit statement that the advisory board has no decision-making authority
This last point is critical. Without a clear statement, advisory members may gradually assume they have governance authority, leading to conflicts with the governing board.
Recruit with Intention
Apply the same thoughtfulness to advisory board recruitment that you would to governing board recruitment. Define the expertise you need, source candidates from diverse networks, and vet them for fit. The advisory board should complement the governing board's skills, not duplicate them.
Manage the Relationship with the Governing Board
The governing board must remain the ultimate decision-making authority. Advisory board recommendations should be channelled through a structured process:
- The advisory board discusses an issue and formulates a recommendation
- The recommendation is documented and presented to the governing board (or the relevant committee)
- The governing board considers the recommendation alongside other inputs
- The governing board makes the decision, which may or may not align with the recommendation
- The advisory board is informed of the decision and the reasoning behind it
This process respects the advisory board's contributions while maintaining the governing board's authority. Using well-structured board packs and meeting agendas helps formalise the flow of information between the two groups.
Avoid Scope Creep
Advisory boards can gradually expand their perceived authority if the boundaries are not maintained. Common warning signs:
- Advisory members speaking publicly as if they represent the organisation's governance
- Advisory recommendations being treated as directives rather than input
- Advisory members attending governing board meetings without invitation
- Confusion among staff about which board they report to
Address scope creep early. Reinforce the advisory board's role in its terms of reference and revisit the boundaries periodically.
Can You Have Both?
Many nonprofits operate effectively with both a governing board and one or more advisory boards. This dual structure works well when:
- The governing board is focused on fiduciary oversight and strategic direction
- The advisory board(s) provide specialised expertise and community connections
- The relationship between the two is clearly defined and well-managed
- Both boards understand their respective roles and boundaries
The key to making this work is clarity. Document the roles, communicate the boundaries, and ensure both groups understand where their authority begins and ends.
Common Mistakes With Advisory Boards
Treating the Advisory Board as a Governing Board
If your advisory board is approving budgets, evaluating the CEO, or making policy decisions, it is not an advisory board -- it is a shadow governing board. This creates serious governance and legal risks. Either give the members proper governing roles with corresponding duties, or restrict the advisory board to its intended advisory function.
Creating an Advisory Board to Park Difficult People
Some boards create advisory positions to move underperforming governing directors into a less harmful role. While this can be a pragmatic solution, it risks creating an advisory board culture of disengagement. If you use this approach, balance the "parked" members with genuinely engaged advisors who set a different standard. For guidance on addressing underperforming board members directly, see our article on when and how to remove a board member.
Ignoring Advisory Board Members
Recruiting advisors and then never consulting them is worse than not having an advisory board at all. It wastes their time, damages the organisation's reputation, and eliminates any chance of the advisory board providing value. If you cannot commit to regular engagement with your advisory board, do not create one.
Failing to Recognise Contributions
Advisory board members volunteer their time and expertise. Recognise their contributions through regular updates on how their advice influenced decisions, invitations to organisational events, acknowledgement in annual reports, and personal expressions of gratitude.
Legal Considerations
While advisory board members generally do not have fiduciary duties, there are legal nuances to be aware of:
Perceived authority. If an advisory member acts in a way that leads a third party to believe they have decision-making authority, the organisation may be bound by their actions under agency law principles. Clear terms of reference and external communication protocols mitigate this risk.
Confidentiality. Advisory members often receive sensitive information about the organisation. While they may not have the same legal confidentiality obligations as governing directors, your terms of reference should include confidentiality provisions.
Conflicts of interest. Advisory members can have conflicts of interest just like governing directors. While the legal consequences may be different, the organisation should still require disclosure and manage conflicts appropriately.
Insurance. Check whether your directors' and officers' insurance covers advisory board members. If it does not, consider extending coverage or obtaining separate coverage, especially if advisory members are providing advice that influences major decisions.
Making the Decision: A Framework
Use this framework to determine which board structure suits your organisation:
You definitely need a governing board if:
- You are an incorporated nonprofit (you are legally required to have one)
- You need a body with legal authority to make binding decisions
- You need to satisfy regulatory and compliance requirements
Consider adding an advisory board if:
- Your governing board lacks expertise in a specific area that is critical to your operations
- You want to engage high-profile supporters who are not willing or able to take on fiduciary duties
- You need structured community input from the populations you serve
- You want to develop a pipeline of future governing board members
- Your organisation is in a period of significant growth or change and needs additional strategic counsel
An advisory board is probably not necessary if:
- Your governing board already has the breadth of expertise you need
- You can address expertise gaps through committee structures, consultants, or training
- You do not have the capacity to manage a second board effectively
- Adding another board would create confusion about governance authority
Conclusion
Governing boards and advisory boards are both valuable, but they serve fundamentally different purposes. Conflating them -- or failing to define their boundaries -- creates governance risk, confusion, and frustration.
If you have only a governing board, make sure it is well-composed, well-supported, and equipped with the tools it needs to govern effectively. If you are considering adding an advisory board, define its purpose clearly, recruit intentionally, and manage the relationship with the governing board carefully.
The right structure is the one that helps your organisation govern well, make informed decisions, and stay connected to the communities it serves. Whether that means one board or two depends on your specific circumstances -- but clarity about each board's role is non-negotiable.