An advisory board of a German limited liability company is a voluntarily established body that serves to advise or monitor the company and its management. Unlike the supervisory board of a stock corporation, the advisory board is not explicitly provided for by law. This also means that the tasks of an advisory board can be designed in a flexible manner.
Advisory boards are often designed to represent key shareholders and investors and to have a smaller body than the shareholders’ meeting in cases of a larger number of shareholders. This allows the management to make decisions more efficiently.
Advisory boards may also serve a consulting purpose. Hence members could also be selected on the basis of their expertise in a particular field and support the company management in important decisions by making their know-how available.