Talking to Shareholders

Newsletters are just one of many ways boards are communicating with the residents.

When it comes to dealing with shareholders, how often should boards communicate with their fellow cooperators? There’s an old saying, “A little knowledge can be a dangerous thing.” And in the three years that John Gebhard has sat on his cond-op board at 140-50 Burden Crescent Owners Corporation in Jamaica, Queens, he has seen that saying play out, as a small piece of information sparked intense discussion.

It started two years ago, when Gebhard and his fellow board members were discussing how to keep down costs in the building. One suggestion was individual water meters – so each cooperator paid for his or her share of the cost of the water usage. While the idea was still in its infancy, a shareholder got wind of it and pretty soon there were ad hoc meetings in the lobby. Gebhard heard about the sessions from an employee. He didn’t panic. He just prepared.

At the annual meeting this past October, he began with humor, thanking the shareholder who spread the news of the water metering “for getting us this great turnout.” The board president then went through a detailed PowerPoint presentation, explaining rising costs in the building and possible ways to meet them. At the end of the session, he was re-elected to his third term. (The idea of water metering is still under consideration, however.)

If knowledge is power, then a little knowledge can be dynamite. Gebhard’s experience shows that there are right ways to communicate with shareholders and wrong ways. Gebhard believes in passing on information – twice a year he dispatches a letter to all the shareholders with a list of items on the board’s agenda – but he feels that there should be limits.

“I think there are some things that you have to provide information [about] at the appropriate time,” he says. Ideas in their infancy should not be “put out for general consumption until such time as the board has done its due diligence.” When all is said and done, “if there is some pressing issue, I am more than happy to take time to put my thoughts together and put it down on paper,” but “by the same token, I’m not really anxious to undertake the work of a monthly newsletter. A building website, however, would be a giant step towards keeping communications open and on track, and we are looking into just that.”

Need for a Newsletter?

There are other ways to communicate. E-mail and paper notices, for example. Every year, the shareholders at the 205 East 10th Street cooperative ask for a monthly newsletter and every year, says board president Don Warsaw, the board puts out an open call for shareholders to work on a newsletter.

“It has come up each year for the past few years,” he says. The board then asks for volunteers, and no one steps up. With eight projects going on currently in the building – from façade work to an elevator rehab to a new laundry room being installed, along with unit alteration applications – the board members are too busy “to start writing newsletters,” says Warsaw.

That doesn’t mean, however, that shareholders don’t know what’s going on in the building. They can reach the board or the management company at the building’s e-mail address, and those shareholders who have provided the board with their e-mails are kept up-to-date on all the public projects in the building.

For those residents who don’t use e-mail, the board typically sends out notices with the monthly maintenance bill, alerting all shareholders to any forthcoming project or pressing issue. The management company, Bell Realty, takes care of the mailings, says Warsaw, who estimates it costs about $20 a month in postage and photocopying, to reach all 30.

Then, too, there is the old-fashioned note. Shareholders can slip a note under a board member’s door, but in the main, “we try to encourage them to write to management with general issues, because management always copies us. We want to give board members some privacy, so they can be neighbors and not board members.”

Big Projects, More News

But the newsletter per se is not dead. The board at the 400-unit 165 West End Avenue Owners Corporation, a co-op with six elected directors, uses a newsletter and other methods to communicate. Don Asch, the co-op president, says board members are diligent about listening to the residents. To that end, shareholders are allowed to attend the public portion of its monthly board meetings and there is a 90-minute question-and-answer session in the lobby three times a year, separate from the annual meeting, to update shareholders on what’s going on in the building.

Typically, about 75 to 100 people come, and as you would expect, there are those who want to raise their voice or hold forth for a long period of time. Managing that is “part of what you have to do” as a board member, maintains Asch.

The board members also send out a newsletter, a one- to three-page summary of what the board is working on, delivered via hard copy under residents’ doors and through the building’s website.

At the end of the day, says Asch, all these different efforts make for a happier building. It’s “much, much better” to have complaints and questions aired than to let shareholders stew, says Asch. “As uncomfortable as it might seem, you need to over-communicate. You need to listen to what shareholders are saying.”