Advisory Board Versus Governing Board—Is There a Difference?
In my long career working with nonprofits, I have interfaced with many volunteer board members. These nonprofit board members have served on either advisory boards or governing boards. Many people continue to ask me is there a difference between the two.
Here's what Elizabeth Layne wrote in an article for The Houston Chronicle:
A nonprofit has assets in community members who are willing to advise the nonprofit, particularly those with expertise in areas that the nonprofit's staff or governing board members do not have. Nonprofits are required by law to have governing boards, but not advisory boards. The biggest difference between an advisory board—sometimes called an advisory committee or council—and the nonprofit's staff and governing board is authority.
Layne also noted that, according to BoardSource, an advisory board usually functions like a committee of the formal board, has no legal responsibilities, and is formed to give advice and recommendations to the nonprofit’s governing board or staff. Says BoardSource: "Activities that advisory boards typically focus on are fundraising, technical assistance, assessment of a program's impact and serving as a public advocate for the organization."
An advisory group can be standing or ad hoc. Carter McNamara of the Free Management Library recommends establishing standing advisory boards for ongoing, major activities that last longer than one year, and establishing an ad hoc advisory board for shorter-term activities. To formalize the advisory board, state in the nonprofit's bylaws its purpose, duration, guidelines for membership, the skills and knowledge its members will contribute and how it will interact with the nonprofit and its board of directors. McNamara also advises that the advisory board have a chair who leads the group and communicates with the nonprofit's governing board.
On its board responsibilities page, the Association of Governing Boards of Universities and Colleges lists a number of guidelines for governing boards and outlines the role they play in an organization. The site includes a comprehensive breakdown of a board's basic responsibilities, including keeping the institution on-mission, recruiting and offering guidance to the CEO, maintaining fiscal integrity, and engaging with the organization's constituents.
The site also lists a governing board's primary operational characteristics:
• The chief executive displays appropriate leadership.
• The board is focused on strategic priorities.
• The board chair and president have an effective working relationship.
• The chief executive’s cabinet is regularly welcomed into board conversations.
• The faculty are meaningfully engaged in institutional or system governance.
• The board operates in a culture of cohesiveness, candor, and transparency.
In a 2011 article for Nonprofit Law Blog, Emily Chan notes that it's easy to confuse the roles of the advisory board versus the board of directors, especially if your organization refers to both groups simply as "the board."
"Incorrect assumptions about who is a director can also expose the board of directors to liability risks," Chan writes. "For example, the confidentiality attached to sensitive matters discussed among the directors can be destroyed if that information is shared with non-board members, such as individuals on an advisory board. Additionally, depending on the circumstances, a failure by the directors to clarify whether such individual is in fact a director can call into question whether the directors have met their fiduciary duties."
In summary, volunteer boards, whether they are governing or advisory in nature, are very important to the institutions they serve. Members of both boards must understand their roles and responsibilities before agreeing to serve on the boards. They should be aware of their liabilities and standards of performance. They should understand that membership is an honor, and 100 percent participation is expected.
At the end of the day, an outsider may not know the difference in the type of board you serve on—he or she just knows you are “on the board.” Before you join any nonprofit board, understand your role and purpose, and why you are serving on the board. Nonprofits need your service more than ever and will benefit greatly from your expertise. Please take this assignment seriously.
Duke Haddad, Ed.D., CFRE, is currently associate director of development, director of capital campaigns and director of corporate development for The Salvation Army Indiana Division in Indianapolis. He also serves as president of Duke Haddad and Associates LLC and is a freelance instructor for Nonprofit Web Advisor.
He has been a contributing author to NonProfit PRO since 2008.
He received his doctorate degree from West Virginia University with an emphasis on education administration plus a dissertation on donor characteristics. He received a master’s degree from Marshall University with an emphasis on public administration plus a thesis on annual fund analysis. He secured a bachelor’s degree (cum laude) with an emphasis on marketing/management. He has done post graduate work at the University of Louisville.
Duke has received the Fundraising Executive of the Year Award, from the Association of Fundraising Professionals Indiana Chapter. He also was given the Outstanding West Virginian Award, Kentucky Colonel Award and Sagamore of the Wabash Award from the governors of West Virginia, Kentucky and Indiana, respectively, for his many career contributions in the field of philanthropy. He has maintained a Certified Fund Raising Executive (CFRE) designation for three decades.