I am a believer in Boards. Whether they be a Board of Advisors or Directors. Business owners, especially small business owners show not be making all of their own decisions. They should be getting input for knowledgeable trusted advisors who have only their best interests at heart.
There are basic differences between a board of directors and a board of advisors. First is that the directors are a legal requirement and they have a fiduciary duty to the shareholders of the corporation (usually the single small business owner), these are defined and submitted to the Illinois Secretary of State on an annual basis on your Annual Report.
Advisors are not a legal requirement and bear no legal responsibility to the shareholders of the corporation. The board of advisors concept to which I utilize consists of people with specialized technical skills that I can draw on for their expert advice. These are people who can bring high level technical expertise that is not ordinarily needed on a day-to-day basis
A board of directors is a legal requirement in any corporation, a board is not a requirement in a limited liability company, but if a client chooses to form an LLC, I recommend that they form a BOA.
A corporation is an entity that is not corporeal, or it has no body (but can make campaign contributions…). Therefore, the board of directors is the body of the corporation and has direct responsibility and fiduciary duties (such as the duties of care and loyalty) to the shareholders of the corporation. The same should be from the BOA members as well, but lacking the fiduciary responsibility.
A board of directors, however, does not manage it no say over the day-to-day functions of the corporation. Managing the day-to-day affairs is strictly a function allocated to
BOA or BOD can consist of any size that the constitution or By-Laws dictate. I personally like smaller, but the size should depend on the outside skills and abilities needed to properly advise the corporation.