Advisory Boards vs. Boards of Directors: What’s the Difference — and Why You Probably Need Both
They serve different purposes, and when structured right, they make each other stronger.
As startups mature, founders often ask: Do we need a board of directors, an advisory board — or both?
The short answer: they do very different jobs.
The better answer: when designed intentionally, they’re complementary.
Where your board of directors is formal, fiduciary, and often investor-driven, your advisory board is flexible, founder-led, and impact-driven. One governs. The other guides.
The best companies don’t choose between the two — they use each to fill distinct roles that evolve over time.
What Is a Board of Directors?
This is your legal governance body. A board of directors:
• Has formal fiduciary duties to shareholders
• Approves key decisions (fundraising, exec hires, equity plans, M&A, etc.)
• Typically includes founders, investors, and independent directors
• Meets on a formal cadence (usually quarterly)
• Is governed by your corporate bylaws
The board of directors exists to ensure oversight, protect long-term value, and hold leadership accountable. Its power is real — and its tone shapes company culture and investor confidence.
What Is an Advisory Board?
An advisory board is an informal but strategic structure that gives founders access to trusted insight and experience — without the governance burden.
An advisory board:
• Has no fiduciary responsibilities or legal authority
• Is selected and led by the CEO/founders
• Focuses on specific areas: product, go-to-market, hiring, industry expertise
• Meets flexibly (often monthly or quarterly)
• Provides a safe space for candor and sparring
In short: they exist to help the founder think clearly and execute better.
How They Complement Each Other
Board of Directors
Governs the company
Legally binding decisions
Composed based on ownership & fiduciary role
Typically meets 4–6 times/year
Approves strategic, financial, and legal moves
Can hold the CEO accountable
Advisory Board
Supports the CEO and management team
Informal and non-binding advice
Composed based on expertise and founder need
Can meet more frequently and flexibly
Advises on execution, hiring, product, GTM, etc.
Helps the CEO be successful
When designed well, the advisory board can become a pre-board — a proving ground for future directors or operators who may join the formal board later.
And when your formal board is investor-heavy, your advisory board gives you access to operator voices, market insight, and domain knowledge that fills the gaps.
Real-World Scenarios Where Both Matter
Early-stage startup
Advisory board adds deep GTM or product expertise while the board of directors is still investor-heavy.
Pre-Series A company
Advisory board includes key industry stakeholders or potential customers to shape roadmap. Board of directors focuses on capital and structure.
Scaling post-Series B
Board of directors oversees hiring a CFO and planning international expansion. Advisory board helps the CEO make real-time decisions on hiring, marketing, and tech strategy.
Founder preparing for exit
Board drives audit, comp, and governance. Advisory board includes seasoned founders or M&A veterans to coach the CEO through the process.
Why You Need Both — Especially as a Founder
Founders often find themselves alone in the gap between ownership control and execution pressure. Here’s where the two boards come into play:
• The board of directors brings accountability, structure, and credibility.
• The advisory board brings clarity, leverage, and support.
And crucially — a strong chairperson or founder can use the advisory board to make the board of directors more effective. You don’t need every question or problem to go to the formal board. A healthy advisory board lets you do the thinking before the voting.
At OPERATORS, we help startups build both:
• Advisory boards made of experienced, relevant operators who bring real leverage to the founder.
• Boards of directors structured with the right mix of investors, independents, and stage-appropriate governance.
Because when both are designed well, founders don’t just move faster — they build smarter.