Hi Caryl,
If the source of the requirement and distinction is your own board's policy, I agree with Mae-Yu that the board should probably clarify the policy.
Until the policy is clarified (or if you're the one who will be proposing changes), I'd suggest the preferred interpretation would be the one that best reflects the purpose of the policy. Represent certain interests? Diversity of experience and perspectives? Prevent conflicts of interest?
Some possible bright lines for defining the public sector include:
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the definition of "public sector of Ontario" in the Public Sector of Ontario Act, 2006
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the definition of "broader public sector organization" in the Broader Public Sector Accountability Act, 2010.