There are four primary types of boards: advisory, nonprofit, private and public/corporate boards. Each type of board is unique in its purpose, responsibilities and stakeholders.

 

Advisory boards provide guidance to an organization, but they don’t have formal authority to make decisions. Instead, board members make recommendations by offering strategic insights, expertise and advice. These boards are expected to aid in strategic planning and provide support to executive teams with specific issues or initiatives. Advisory board members are typically experts or experienced professionals who can extend industry-specific knowledge without being directly involved in the day-to-day operations of the organization.

 

Nonprofit boards oversee nonprofit organizations, ensuring fulfillment of the organization’s mission and financial sustainability. This type of board is often comprised of community leaders, donors and passionate individuals who serve on a voluntary basis. Members are responsible for fundraising, strategic planning and legal and ethical compliance. They also hire and assess the CEO and contribute to budgeting and financial duties.

 

Private boards oversee management and major decisions of privately held companies. These boards facilitate major policies and investments and supervise ownership, succession planning and investor relations. Private boards generally include major shareholders, executives and some independent directors or advisors. It is common for board members to have a direct financial stake in the company.

 

Public or corporate boards are the most well-known type of board and govern publicly traded companies. These boards must oversee management, assure regulatory compliance and maintain representation of shareholder interests. Directors are expected to uphold transparency and accountability when delivering high-level strategic decisions, financial reporting, risk management and executive compensation. Public boards encompass company executives, independent directors and even representatives from major institutional shareholders.