Dealing with Difficult Shareholders

Nuisance neighbors driving you nuts?
There are practical ways to cope.

Frank Lovece, a freelance writer, is a co-op owner. He is the author of a number of books, including The X-Files Declassified. He wrote about share value and cooperatives in the April issue.
You know what they say about people: “It takes all kinds.” You know what they don’t say? That every one of them lives in your apartment building.

Difficult shareholders are a fact of life. Sure, you can just be curt and authoritarian, citing bylaw chapter-and-verse, or pound the gavel and cut them off at a meeting. But you still have to live with them.

Threatening fines or legal sanctions is the nuclear option. Being authoritarian is calling in the National Guard. So what everyday options do you have with pain-in-the-neck people? You can become “Officer Friendly, Here to Help” – because remember, Officer Friendly still carries a gun.

“No matter how people act out their frustrations, whether it’s in memo-writing, or knocking on doors [late at night], or standing up and being obnoxious in a meeting, you’ve got to find their underlying interest,” says Nancy Gardner, founding director of the mediator consortium The Alliance for Mediation & Conflict Resolution. “You’ve got to indicate to them that you understand what they’re telling you, and that you take seriously what they have to say. People always want to feel valued and listened to.”

“Sometimes, there’s an attitude of, ‘I’m the board, I can do what I want, and you’re the horrible little shareholders,’” notes Andrea Bunis, principal in Andrea Bunis Management.
It may not be easy, because of pride, but showing respect to even the most difficult or inconsiderate shareholder nips a lot of problems in the bud. As management consultant Arthur Davis puts it: “A board needs to set up an open, communicative, and frank structure that respects people’s input. Otherwise you create a breeding ground for malcontents.”

Giving respect doesn’t mean that a board’s a pushover, or lacking spine. Just the opposite: it greases the wheel so that the board can get done what it needs to get done – with an added benefit: if you’re listening to difficult shareholders rather than tuning them out, you may very well discover a good idea.

Here, based on interviews with board members, mediators, managing agents, and others, are practical, ground level ways of dealing with such archetypes as…

The Long-Winded Talker

We’ve all met him. At the annual meeting, he’s the one who thinks he’s at a union hall in 1930, standing on a soapbox. “We had one guy who’d come to the meeting, make a huge scene, go on and on, and then storm out,” remembers Mark Frawley, the former board president of an Upper West Side co-op in Manhattan. “And you’d never hear from him again until next year’s meeting!”

What to do about the Long-Winded Talker? Set limits beforehand. “You give a limit of a minute, or two minutes, or whatever the board is comfortable with,” for comments from the floor, says Davis. “But you have to give a limit.”

And if someone objects? “You say you want to make it fair for other people who want to talk,” notes Davis. “If you don’t have a strong board president who’s facilitating this and who’s running the meeting tightly, you’ll spend all night.”

What if you haven’t set a limit, or if the Long-Winded Talker ignores it? You can’t be passive. “My way of dealing,” says Warren Schreiber, current president at the 200-family Bay Terrace Cooperative, Section 1, in northeast Queens, “is to wait for an opening and then say, ‘Let me see if I can sum up what you have said,’ or, ‘Let me make sure that I understand correctly.’ That way, I let them know I’ve heard them and know what they’re saying, while at the same time taking the floor away from them.”

Of course, the Long-Winded Talker can buttonhole you in the lobby. Herman Gerson, the former board president of the 174-unit 500 LaGuardia Place in Manhattan, says he’s found it effective to “generally let them talk as long as they want. They get it off their chests, and they feel a little better after they sound off. That way it doesn’t create a spirit where the board is acting like dictators and not allowing free speech.”

Schreiber agrees – up to a point. “When a shareholder with complaints approaches me in the street, I recognize that most of the time they’re talking out of frustration and just need to vent. I’m not going to stand there for a half-hour, but I afford them some time to vent, and then I end the conversation by saying, ‘I have to further investigate what you’ve told me and based on that we’ll take whatever steps are necessary. Thank you for coming to me.’ It’s important to let them know you’re glad they brought it to your attention.”

It’s also important to really listen, and not just pretend to. Someone might be railing against redoing the lobby, for instance, and you tune them out because the majority has agreed that redoing the lobby makes perfect sense. What possible reason could they have for not wanting that?

Now you’re asking the right question. “You want to find out their real, underlying interest,” advises Gardner. ‘Because you just don’t know. You can assume you know, but you don’t necessarily know. It may be they’d like to have a nicer lobby, but they’re concerned about assessments. Or about changing the character of the building. Or about what [convenient access] they may have to give up if you’re changing the entrance around or putting it in a different place.”

In this example, you turn the negative around. They’re telling you what they don’t like. So find out what it is about the current lobby that they do like. That’ll help you discern whatever specific, underlying reason they may have – and allow you to adjust details or find a compromise. “If someone’s concerned about an assessment because they’re in a bad money situation,” says Gardner, “you might work out a payment plan, for example.”

The Door-Knocker

When it’s 11 o’clock at night and you’re getting ready for bed, knock-knock is not a joke. “Knocking on a board member’s door is unacceptable after 7 or 8 o’clock at night,” says Davis flatly. “Board members have lives that must be respected. The only time you knock on a door late is for an emergency.”

“There’s a serious boundary issue here,” notes Herb Cooper-Levy, former executive director of the National Association of Housing Cooperatives. “Unlike other boards, you can’t go home elsewhere. It’s really critical, so that people don’t burn out as volunteer leaders, that they set firm, bright yellow boundaries.”

One tactic for dealing tactfully with such people is not to answer the door. “If someone asks where I was,” says Cooper-Levy, “I can say, ‘Asleep. Was that you trying to wake me up?’”
Of course, shareholders who come knocking or phoning, especially late at night, are sending a message in addition to their complaint or suggestion. They’re saying the board hasn’t provided a clear, satisfactory policy of how shareholders should communicate their needs and wants.
As with the Long-Winded Talker, the best defense is a strong offense. “You need to set up some way that complaints can be acknowledged and responded to in a timely way,” says Ruth Eisenberg, who served for several years on the board of a 61-unit co-op in Morningside Heights, “so that [sitting on a board] doesn’t become a 24-hour occupation.”

Schreiber’s co-op does this with the simple solution of having an answering service. “It’s our regular number for the building, and automatically switches over after-hours. An answering service takes the call and forwards it immediately to the [building staff member] who’s on duty that evening. Even if it’s three in the morning.”

The Memo-Writer

This is a matter of spam. Your personal e-mail address, which you’ve kindly given out to the shareholders so that they can easily contact the board, is clogged with shareholder mail – whether it’s a collection of one-sentence messages from one person or a single huge message, with a 500-word diatribe, attachments that may unknowingly carry a computer virus, and memory-clogging, high-resolution images of a leaky sink from every possible angle (plus audio and video of the drip).

“I’m looking at a book somebody e-mailed me the other day,” says Bunis, only half in jest. Carol Pratt, a former board member at the 55-unit co-op on Manhattan’s Riverside Drive, remembers “one person [who] would flood us with information to support his point of view, as though he had to argue his case and here’s all the evidence.” The memo-writer, she says, “bred this resentment, and it didn’t even mater that his points were good and well-written and well-presented, because it felt like somebody was invading my computer.”

Memo-Writers feel a need to document, to leave paper-trail evidence in black-and-white. Without getting into the larger topic of e-mail etiquette (for that, see “Everybody’s Talking,” Habitat, March 2006), just remember to think of e-mail as a Miranda warning: anything you say can and will be used against you. And in any case, it’s better and more personal to respond by phone or in person.

If you’d rather not, then Pratt’s advice is to “send a very short sentence back. This tells them they’re being listened to, but also to back off. I used to spend a lot of time responding to each and every point [in an e-mail] and it would take me an hour,” as well as open the board to potential liability.

As with the Door-Knocker, the best way to avoid the Memo-Writer is for the board to have a reasonable, easy-to-understand communication policy that applies equally to everyone. Set limits: e-mails should be a hundred words, tops. That’s enough for a quick question about something unclear, or to tell you there’s a dryer broken in the laundry room. Anything more complicated almost certainly needs to be brought up formally at a board meeting or with the managing agent.

And if, as happened once to Pratt, the Memo Writer sends you a personally nasty or wildly impolitic e-mail, don’t respond. Give it to the board. It’s always best to try to talk things out first – and in cases like this, with some backup or protection, even if they’re only protecting your reputation by being witnesses.

The Rabble-Rouser

How do you handle those firebrands who like to create petitions for this or that, and stir up other shareholders over what seem like non-issues?

You listen to what The Rabble-Rouser has to say. That doesn’t mean indulging his every whim and demand – it just means giving him the respectful audience you’d give anyone with a less strident style. The Rabble-Rouser might be a turn-off personally, but that doesn’t automatically mean the message is wrong. “One man’s difficult shareholder is another man’s enlightened, concerned citizen,” notes Davis.

And even if we’re not so enlightened ourselves, trying to stop the Rabble- Rouser is not only undemocratic, it’s impractical. “That gives them ammunition,” says Bunis. “They can say,‘See? They’re trying to stop me.’ Allow them to go on with their tirade,” she advises. “People usually get turned off by them, anyway.”

If what they’re saying is inaccurate, of course, the board must respond immediately with a calm and reasoned communication to all shareholders.

But stick to the high road. After all, notes Cooper-Levy, “Everybody has something of value, even the Rabble- Rouser. Simply because he’s a member of my community, I need to hear him as clearly as I can.”

An added benefit is that such an approach helps you co-opt the complainer. “One of the ways I address them is to involve them in the operations of the co-op,” Cooper-Levy adds. “They feel they have knowledge to share, or a key perspective or pertinent information, so find a committee to put him on, or create an ad hoc committee. Instead of looking at them as a problem, look at them as a volunteer.” Not every Rabble-Rouser wants to take on such responsibility, “but at least you’ve given them the choice.”

Gerson offers an additional tip. “We have a newsletter that comes out a few times a year, where people can submit articles with problems and complaints. It gets [their grievances] out to the public, and it shows you’re open.”

“One time we had a shareholder who was really, really angry,” says Schreiber, “and he wanted to know how he could remove the board of directors. Nothing we said could placate him.” Where did Schreiber find the solution? On the high road, naturally. “The bylaws outline all the procedures for removing the board, so finally I said to him, ‘Well, it’s your right to pursue that, and I respect that right. And if you try to remove the board completely, please come to me first – and I’ll be the first one to sign your petition.’”

The Rabble-Rouser never made up the petition.

The Kid/Dog Defender

“I’m not touching that one with a 10-foot pole!” says one interviewee, reflecting on how touchy shareholders get about any criticism of the behavior of their children – actual or metaphorical. If you think only a proud mommy can get her hackles up, try talking to the woman walking her septic-tank-on-legs Great Dane.

“There is no good, nice, simple way, in general,” says Davis, to deal with shareholders who let their kids drop a half-eaten ice-cream cone on the hallway floor and walk away, or who let their dogs do their business in the lobby. “Some people,” he notes, “feel their dogs and kids put them in a special category where rules don’t apply.”

Gardner suggests that a board “try to reach out to that person and ask if you can discuss with them some issues that you have. Then you sit down privately and discuss what’s been reported, why it’s a problem, and is there anything you can do to help them with the problem? That way you’re not just saying, ‘Don’t do that.’ You’re creating sense of cooperation and collaboration.”
If they still don’t see the problem? “You let them know there is a problem and you’d like to discuss with them possible solutions. You have to put your foot down sometimes. You tell them, ‘I’d like to not fight with you; I’d like to collaborate.”

Additionally, says Bunis, “You send out a reminder that this is everybody’s home and pet-owners need to clean up after their pets. Even if you know who’s doing it, send out a general notice so that you’re not pinpointing and embarrassing anybody.”

If that doesn’t work, make it a matter of dollars and scents. “If you’ve got someone disturbing the common area, whether in the lobby or outside, that’s a cost,” Davis says, “because to clean it is a cost. ‘If you don’t mind dog [feces], we’ll replace the carpet every week. Does anyone have a problem with the building bearing that cost?’ There has to be a policy, and it has to be consistent and fairly enforced.”

That last suggestion holds true, no matter which difficult shareholder you’re dealing with. Remember that people can get difficult when they feel they’re not being treated equally, or feel they’re not being listened to.

“People must know that if they have an issue, it will be dealt with openly, fairly, and promptly,” says Davis. “And all three of those are critical. There are always going to be people who feel their interests are not being served. But as long as you have a strong, forthright board that treats people equally according to a clearly communicated policy, you will have fewer of them and they’ll be easier to manage.”

And, above all, says Ray Potter, a former board president and now secretary of the Stewart Heights development in Mount Kisco, N.Y., “Keep a sense of humor. If we’re laughing, then we’re not lashing out.”

STEPS TO TAKE
TO DEAL WITH DIFFICULT OWNERS

• At meetings, let them speak – it’s better that they get it off their chests.
• Set limits beforehand on how long someone can talk at a meeting.
• Listen to them – they may have a point.
• Set boundaries for after-hours
personal interaction.
• Set up an answering service for late-night callers.
• Set limits: e-mails should be a hundred words, tops. That’s enough for a quick question about something unclear.
• Co-opt the complainer: put him/her on a committee.
• Create a sense of collaboration.