When is a Corporate Board not a Board?
This post explains the difference between a corporation’s board of directors and an advisory board – a point that may not be clearly understood by some people, especially those from other countries, where corporate governance is different from that in the U.S.
The board of directors is elected by the shareholders and is responsible for management of the company. It appoints and removes officers (who run the corporation’s day-to-day business) and makes important decisions about finances and other matters.
An advisory board provides advice on issues that are important to the corporation’s business. The advisory board is merely a resource – it has no power to make corporate decisions or to act on behalf of the corporation.
Photo credit: Muriel Miralles de Sawicki via stock.xchng
Dana H. Shultz, Attorney at Law +1 510 547-0545 dana [at] danashultz [dot] com
This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact a lawyer directly.
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