Putting Your Best Face Forward

Dear Mary:

We’re having a spirited discussion on our board about how we should come across to our shareholders. How formal should we be? How transparent? Are casual interactions with shareholders OK? To what extent do we ask for shareholder input? Should we explain board decisions? We’ve recently realized that our directors have differing unspoken assumptions about this — and that those differences are the source of some of our disagreements. Any best practices to consider?

— Debating in Dyker Heights

Dear Debating:

Good for you for uncovering unspoken assumptions! And for recognizing how they can cause conflict. The key here is to articulate and focus on overarching goals.

You likely agree on operational and project-specific goals. You want to comply with local laws. You look to maintain the building’s financial and physical health. You’ll renovate the lobby. You’ll install LED lighting in common areas.

But you should also have broader aims. You might want a feeling of harmony in the building. You may seek to foster trust with shareholders. You could want widespread support for board decisions.

If you can agree on those broader goals, you can answer your own questions on how to come across to shareholders. When discussing this with directors, consider the points below.

People want to do things for those they trust and like. Do you want your shareholders, managing agent, resident manager, etc. to do the things you ask? Want them to give you the benefit of the doubt when things go wrong? Or believe you over others? They’ll be most inclined to do so if they trust you or like you. Preferably both!

Walking the talk builds trust. If you want people to trust you, your words and actions must align. Do you follow the same building rules you want others to follow? Do you keep promises? When (if) you ask for input, do you actually do something with it? People are watching — and drawing conclusions about your trustworthiness.

Interaction builds trust and liking. The more people get to know you, the more time they spend with you, the easier it is for them to trust and like you. Unless you’re unpleasant or standoffish, of course. (Don’t be that way!)

Common values build trust and liking. The more people feel that you are similar to them — particularly in your values — the easier it is for them to trust and like you. They’ll draw conclusions about your values by what you do and what you communicate. But if they never see you or hear from you, they won’t be able to spot similarities.

People are more willing to support decisions they understand. You know why the board made a particular decision. But shareholders can’t read your minds. If you don’t explain, you should assume they’ll come to their own conclusions. Those conclusions may be incorrect — and can create resistance for no good reason.  

People are more willing to support decisions if they’ve had a say. Most shareholders won’t feel the need to weigh in on your decision to comply with local laws. Or your maintenance schedule for the health club (unless things aren’t working). But when it comes to appearances or to spending a lot of money, they naturally want to give input. Your willingness to ask for it — and to show how you’ve taken it into consideration — will help determine what kind of support you get.  

So what board “face” best supports high-level goals? Don’t be too formal, be transparent where you can, interact with your shareholders, get their input where appropriate and explain your decisions. Will you give it a try?