Directors – names are (in most jurisdictions) recorded on the public registrar, role is to protect the shareholders, accept some legal liability, vote on company major decisions. No hands on day-to-day activities.
Executive Director – same as above, but also in an executive role (e.g. President), with hands on day-to-day operational activities.
Advisors – No voting rights, usually are experienced or well-connected business people, guide the founders.
Compensation may vary for directors/advisors
I had previously written in this article that whether a company has a board of directors or a board of advisors, compensation is flexible.
A company may choose to compensate either a director or an advisor in cash, with options, a combination of cash and options, cash only, or the company may even choose not to compensate such directors. This is not a critical factor for choosing a board of advisors over a board of directors or vice versa.
Public company board of director positions can receive seven digit compensation. At the other end of the spectrum, a startup company more likely can offer options for compensation. When offering option-based compensation consider the following:
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This blog was originally posted by Farrah Roahman
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