Boards of directors and advisory boards both are essential to the success of a company, but there are some important distinctions between them. According to a recent article by board expert Marissa Levin, the main difference is that a board of directors is obligated to be fiduciary while an board of directors vs advisory board advisory board doesn't. This means that a board is legally accountable for the actions they take and implies that they have to weigh the effects of their decisions on the company's financial bottom line.

However, even though a board of advisors doesn't have fiduciary obligations, it's vital for an organization to carefully consider the impact of their advice before taking it into consideration. If a CEO accepts the advice of an advisory board and it is negative for the business, the members of the advisory board could be accused of negligence.

To avoid this, businesses should ensure that their advisory boards have explicit written explanation of its role through an agreement with the board or another document before they recruit members. Additionally, it is possible to clarify that an advisory board is not a legally-constituted board of directors and does not have any responsibility in the company's bylaws or in a written statement from the CEO.

It is also advisable for an organization to have an evaluation policy for its advisory board, that includes the purpose and the scope of the evaluation. If it's an advisory panel or a regular board of directors, establishing clear guidelines and goals for an evaluation will ensure that the board gets the most value from its members.