“You want to make sure that diversity of thought is there and the ability to bring things up and not just go into the group and think on how things are moving.” -Christin McClave
[00:00:00] Christin McClave: The boards that I’ve been on that have been very well-functioning from a nonprofit standpoint, really do have a nice balance of people who are still in industry. People who are very well versed in audit and finance and can pick out what might not look right on the financials or where things are, could potentially go wrong in the future if they’re not managed properly.
[00:00:27] Tommy Thomas: This week we’re continuing the conversation with Christin McClave that we began in Episode 81. In that conversation, Christin shared her leadership journey from Johnson and Johnson to Cardona Industries, an aftermarket business and the automotive sector that her father and grandfather started. Christen has a lot of board governance experience in both the private and nonprofit sectors. Let’s pick up on that conversation.
Let’s go to board service. You are a busy lady, with a family and a business. When did your first nonprofit board show up? Or maybe, how did it show up?
[00:01:08] Christin McClave: My first nonprofit board experience actually came from an organization I was a part of in my high school years. I was a part of a teen missions organization. I went on a couple missions trips with this organization and then, eventually, I stayed in loose communication with them.
And then it was, a friend of a friend. And they really wanted to find someone who had actually participated in some of their programs. And it’s just, it’s really a word-of-mouth thing at that point, and that was a much smaller nonprofit. And it was a really wonderful organization.
I learned a ton and I was able to actually have a few mentors on that board helping me through the process and learning about governance and what needs to be in place, maybe what wasn’t in place there. And how to see things in, as a non-profit board member.
That was a really awesome learning experience for me. And then subsequently, one of my mentors on that board eventually left, and then he asked me to put my name in the process for the next nonprofit board, which was much larger at that point. And I ended up joining that board. So, it’s a cycle and a follow on.
If you’re doing good things and bringing good value to the board you’re on and providing feedback and good support and connections, it’ll pay off to the next one and the next one.
[00:02:48] Tommy Thomas: Peter Drucker has been attributed to have said a lot of things. I’m not sure if we could have talked to Dr. Drucker about what all he did say, but one person said that Dr. Drucker said there’s one thing all boards have in common. They do not function. Based on your experience what might make that truth, if it’s true?
[00:03:05] Christin McClave: I think it goes back to what we were talking about earlier, these systems that we try to put in place and we expect perfection from them.
We’re all imperfect people coming to the table. And we’re all human and those structures are very rigid and there’s a lot of, I’ll say literature, books, there’s magazines, everything out there. I was just reading the Director and Boards magazine. There’s all of these best practices that we’re supposed to have in place.
And the reality is there’s cultural things that happen. There’s crises that come into play. There are unforeseen circumstances, if you’re working with a global nonprofit board, you have all kinds of economic and cultural factors that you have no control over.
And you have these great board agendas and these wonderful committees and you’re just constantly trying to make it easy. And at the end of the day there’s always something. We live in an imperfect world and we’re all imperfect people. And the human dynamics of coming together with a lot and especially now we’re also wanting more diversity of, thought and diversity of, race and gender and background coming to the table together.
It’s going to get even more and more complicated because we’re having to come from different perspectives. The discourse has to be more robust about challenging what the agenda is or what’s on the table, or what things are important. And then, layer on top of that, you have a management team, right?
And you’ve got these two disparate systems coming together in a collision, at a board meeting, right? And as much as you’d like to think we’re partners with the management team and at the same time, that’s not always your role. Your role is also to be an oversight to what’s happening in the organization.
And there is some tension between, if there’s tension on the management team, how do they function together? It’s great to have a highly functioning, highly performing executive team, but we all know that doesn’t always happen and they’re coming into the room and then you have this board who have varying degrees of, you’re always rolling people on and off a board.
So, it’s big. A wonderful and a challenging collision of personalities. And then we have this, like I said, this system and this equation of what, the best practices of boards should and, shouldn’t be. I think I agree with Peter Drucker there and that, it’ll never be perfect and we’ll always have our dysfunction.
But we can all come to the table with some type of growth mindset and openness and humility. Then I think we can get a lot of things done.
[00:06:03] Tommy Thomas: I’ve been in this business a long time and I’ve worked with probably 300-400 boards, over the last 30 years. And if I look at them, I will say a lot of the time they’re, they’d be males a lot of the time. They might be closer to my age than your age.
And now things are changing. So, what are you seeing, or maybe what are you doing to lower the mean age on a board and to maybe bring more gender and ethnic diversity?
[00:06:32] Christin McClave:
So, I think we see a lot of changes in the general demographics, right? As our society and culture are changing. The positive thing is there’s so much more diversity coming up through the leadership ranks.
And I think, the traditional way that we’ve, I’ll say we, because I’ve done it myself as well, when we’ve needed a new board member on a board I’m on, I instantly think about who have I worked with before? Who’s like me, who thinks like me, who would be easy to plug and play into this board that I’m on? And so that’s been our traditional way of pipelining onto boards. Let’s find people who we know and who we know could be very quickly successful and contribute value to this board.
I think what we’ve learned over the last couple years is that it doesn’t necessarily bring diversity to these boards that we are trying to diversify. And we’ve seen the pressure coming from the public sector the SEC, not quite regulations, but suggestions that we need more, a certain percentage of diversity on the public boards.
And there’s a lot of pressure in the market for that. And then that has trickled down its way to nonprofits and to the private sector. So, everyone is looking to diversify their boards at this point. And I think, a key piece of the job requirements that we have in the past always assumed on larger boards, I’ll say.
And most boards in general, everybody’s wanted, okay you need to have a CEO or CFO or a C level executive. But preferably a CEO or CFO who’s been in the chair before. And I’ve had people say that to me as well, that’s what they’re looking for. And I think we know just from sheer data that a lot of women and diverse candidates in general haven’t had those opportunities.
And in the past, and we are trying, we are definitely developing that pipeline now and being very much more intentional. But I think like through the past few years and now looking at the talent market being as hot as it is and the demand for diverse talent we have, we are at the place we need to take a look at those very narrow criteria that we’ve, we’ve said, oh, you have to be a C-level executive to be on a board and to be able to contribute value. And I think, now I’ve seen a lot more being written, a lot more being talked about a lot more, diversity coming onto boards where I’m reading someone’s background and I’m like, wow, that is so cool.
Maybe 10 years ago that person wouldn’t have been chosen for that very significant board seat. So I think it’s really just that we’ve opened up our criteria and have opened up our thought process and how we see people’s experiences. We’re looking at people’s resumes really differently these days.
We even, from an HR perspective internally, when we’re screening candidates. We took the requirement of having a college degree off of our requirements, probably, about 10 years ago, which was a little bit ahead of our time, but it just opened up our talent pool and we realized there’s a lot of people out there that may not have a bachelor’s degree but are way more experienced with their life and work experience that we were not being able to tap into because we had that very strict requirement.
So I think we’re seeing that across the board at all levels, including at the board level.
[00:10:23] Tommy Thomas: A few episodes back a guy emailed me after the episode and he talked about that he was on a startup nonprofit, and he had some questions. He said, maybe you could do a whole episode on startup nonprofits. And I hadn’t done that yet, but I have asked people like you the question.
If you were approached by a friend about doing a startup on a nonprofit, what are some questions you would ask? What kind of counsel are you giving that person? And this may go over to the board piece too, because I think boards are so critical.
[00:10:56] Christin McClave: Yeah. That is one of the key questions I would be asking. And maybe it’s, at a startup stage, it’s not a super formal board. That word board we’ll put in air quotes because, it’s you’re not paying anybody. You’re not, and in a nonprofit, you’re not paying anybody to be on the board anyway.
And you really need maybe more, something more like a sounding board and an advisory, an informal advisory council, if you will, that is able to bring some experience, some strategy, help you see what’s down the road. The challenges, help you figure out, really the funding model and you know how you’re going to approach that because that is your primary driver in any type of startup nonprofit. You really have to have the ability to raise money in a different sort of a way. It’s not the traditional, you get a pitch deck with the in and you go into a Shark Tank environment and you present to all kinds of funding sources.
This is a whole different thing because you have this passion, this problem you want to solve, and you’re trying to engage people in that mission with you. And then hopefully they’re going to commit some donations and fundraising into that process. So I think having that advisory function in some way is really important.
And in more established nonprofits, they’re meeting quarterly, but I think in this case you’d probably want to have someone on speed dial for different things, who’s your mentor, your coach, and then having some type of advisory, council or loose board that you meet, like probably monthly to help you stay on track, build out your strategy, and support you, even from a, like I said, mentorship and coaching standpoint.
[00:12:56] Tommy Thomas: You’re probably not old enough to remember the Enron scandal, but I certainly would be and certainly the private sector took a lot of heat and justifiably how do you get your fellow board members to ask tough financial questions?
[00:13:07] Christin McClave: Yeah. That is a challenge. In the nonprofit space, it’s more of a challenge on those boards because people do come to those boards because of the mission, because of the passion they have for the mission. And if you’re on certain boards that you know are, have a Christian focus or some type of religious focus, you want to have some percentage of the board coming from either ministry, and then the other part of the board is coming from the business perspective.
That seems to be a really nice balance actually. I’ve enjoyed being on nonprofit boards who have a good balance of those two things. Everybody needs to be passionate about the mission, but then on the for-profit board side, you tend to get people who are heavily weighted to the financial side.
You spend a lot of time with your audit committee chair. You spend time with the auditors, you’re spending a higher percentage of time on the financials and the strategy and the metrics and much less time on the culture and the people strategy and which, we can talk another time, about how that’s probably, an imbalance and needs to be more balanced on the for-profit side.
I think it’s really key to have the right balance of people coming from the for-profit sector and also people with good finance background who know how to dig into the numbers and know how to highlight things that could be potential issues going down the road.
And the boards that I’ve been on that have been very well-functioning from a nonprofit standpoint, really do have a nice balance of people who are still in industry. People who are very well versed in audit and finance and can pick out what might not look right on the financials or where things are, could potentially go wrong in the future if they’re not managed properly.
The for-profit sector doesn’t really have, as I haven’t experienced that. They tend to have a much deeper focus on the financials and really, that diversity that we talked about earlier is also important, to make sure you don’t have a bunch of, a bunch of the same type of people on your board who are not willing to bring up the financial issues that they see and they’re willing to speak up and challenge.
You want to make sure that diversity of thought is there and the ability to bring things up and not just go into group think on how things are moving.
[00:15:59] Tommy Thomas: I’d like you to respond to this quote: “You need a director on the board who will be a pleasant irritant – someone who will force people to think a little differently. That’s what a good board does”.
[00:16:10] Christin McClave: Yes. Wow. A pleasant irritant. I really like that a lot. And I will aspire to that title because I think sometimes with my age, and I’ll say I’m 46, but on a lot of the boards that I’m on, I tend to be on the younger side. It’s something that I can fall into, okay, I’m here and I don’t have as much to bring to the table that everybody else does, but I really do need to speak up and be that pleasant irritant on the board and ask the questions.
They asked me to be on the board because I’m coming from a different perspective. So, I think it’s really important. We actually had a role on one of our nonprofit boards. And this came to be after we had experienced a crisis together as a board and got through it and we realized we had gone into that group to the point where we let something occur and we didn’t challenge it.
We didn’t challenge the management team like we should have as a board. So, after that crisis subsided, we came together and said,
Hey, we need a loyal skeptic.
Every single board meeting we have, someone who is going to be given the hat of loyal skeptic and, which sounds like, similar words, you said pleasant irritant.
So yeah, and that really was an interesting experience. When I had to take on that role you really put that hat on, and it changes your thinking. And we had moments in the board agenda where we would say, okay what does the skeptic have to say about this? And we wanted to make sure we were getting the alternative position to what we were all agreeing to.
[00:18:03] Tommy Thomas: I asked Dr. Linda Livingstone, the President at Baylor that question, and I asked her, did you need to appoint one? And she says, probably not. They generally show up.
[00:18:13] Christin McClave: Yeah. I think if you start calling attention to the fact that we want and we celebrate and we need to have some skeptics and some different points of view, we celebrate that.
I don’t think you necessarily have to put the hat on someone. You just have to keep on a regular basis saying, are we getting, what’s the alternative point of view here? What’s the skeptic going to say? And I think we can all do that in our board context.
[00:18:42] Tommy Thomas: Let’s close out with maybe a couple of comments about the board chair because that’s a critical role in nonprofits.
So give me some words and phrases that would describe the best board chair or chairs that you’ve observed in nonprofits.
[00:18:57] Christin McClave: So, composed, I’m thinking of all the board chairs that I’ve been a part of, I’ve been a part of composed, professional, empathetic, and humble yet still very organized.
And they’re the ones that keep us going and keep us on track. And at the same time, they’re very savvy with understanding the dynamics of the management team, the CEO, the relationship with the CEO and the relationship to the board. And they are really integral to that working well.
They spend time with the CEO offline. They potentially spend time with the leadership team and the CEO. It’s an incredibly dedicated role that the chairs that I’ve been blessed to be under as a board member have been just remarkable in their ability to balance all the stakeholders.
The stakeholders in the room balance all of those very complicated systems that we talked about earlier. Bringing them all into one room and being even, you could say it, a conductor of an orchestra in a way. I’ve seen them and at the same time, the chairs of nonprofits, like I said, really must be committed, passionate about the work that’s being done in that nonprofit.
I have experienced one board where the chair was really doing it out of, I don’t want to say obligation, but it was like, okay I’m trying to help this organization. I’m trying to help this CEO. But maybe that person’s personal commitment wasn’t really so passionate about the actual work that we were doing and that’s needed at some points like that, we needed some structure and some discipline on that board.
So that was a good thing for a short time or an interim time. But the ones that I’ve seen to be very effective have been passionate about the work, really passionate about supporting the CEO and the management team, and giving them the support from the board they need. And then at the same time, like I said, bringing that skeptic voice and making sure that voice is heard in the meetings is really important.
So there’s a level of humility and then a level of organization and professionalism that has just been really important to see, especially when you have large nonprofit boards. These boards tend to get over 15 people and they get to 20-25, and that’s a whole other level of orchestration that a chair has to have to be involved in. And it’s a definite skill. It’s really amazing when you see it working.
Our guest next week will be Lisa Trevino Cummings. Lisa started her career with Bank of America and spent 12 years there before leaving to head Hispanic outreach efforts for The White House Office of Faith-based and Community Initiatives. In 2003, she started Urban Strategies – a social enterprise with a mission to connect and resource community and faith-based organizations in hard-to-reach communities.
[00:22:26] Lisa Cummings: I grew up in a culture where there were no boundaries in terms of work life, that sort of thing. Partly because we were in poverty, so you’ve got to do whatever you got to do to make ends meet, right? And many people are still in that situation. However, I would say that as folks have a more of a mixture of cultures, the young folks that we’ve been hiring, they are very intentional about drawing boundaries so that their work doesn’t end up being, seven days a week, 24 hours a day.
“At every single board meeting, you need someone who is going to be given the hat of loyal skeptic – whose job it is to bring up the alternative point of view – to ask the question ‘what would the skeptic say?’” -Christin McClave
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