If an organization, investor or shareholder are in a conflict involving allegations of dishonesty, bad faith or fraud, there will come a time when they find themselves in a room with the opposing party. The dispute could be a shareholder-to-shareholder standoff, conflict between investors and senior management or a creditor-debtor conflict. Whether this is a prelitigation meeting or a settlement attempt, the organization, investor or shareholder will be facing the opposing party and/or their representatives in difficult conversations. In this article, we provide several practical recommendations and best approaches to organizations, investors or shareholders for running these meetings.

What Do You Seek to Accomplish?

Why are you having this meeting in the first place? How does this meeting fit into the overall conflict management and resolution objective? These two questions are not trivial, for the answers to them will guide both the preparation and the tactical moves in the meeting itself. Yet often, organizations miss this critical step in its preparation. In our experience, every such meeting has at least two sets of objectives:

• Do you seek to influence the opposing party? In what way and how does the result fit into the overall process? For instance, do you want to alter the opposing party’s perception of what they know about what happened? Do you want to affect the way they understand their best alternative to the agreement? Do you want to inform them that you are ready to settle, while convincing them that the legal route is also a solid option?

Such meetings are influence games, where each party tries to shape the perception of another, and usually the most prepared party gets the upper hand.

• Do you want to learn something? If so, what specifically? Their position and underlying interests? Their fallback options? Their readiness to settle? How will this aid you in conflict resolution? How do you plan to elicit this information?

Clarity of objectives yields better results, on average. The additional benefit is that you will be able to assess your performance against those objectives and to learn better and quicker.

Have the Facts Straight

When you go into these meetings, you should understand what previously happened.

No matter how much information you have at the time of the first meeting, the information should be organized properly, and you should be intimately familiar both with the facts and any gaps in your understanding at that point in time. You will be operating in a high-pressure, hostile environment, and there will be no time for fact-checking in the room. Fact-checking would diminish your credibility and could be used by the opposing party. Second, you will have to make split-second judgments about what to disclose and what to withhold. To be able to do this, you should understand the facts.

We recommend an inductive approach to reasoning and outlining of facts rather than deductive, simply because it is an easier way to organize information for such meetings. Compare:

• Inductive: There are strong indications that $X million might have been uplifted from the company: indication 1, indication 2, indication 3.
• Deductive: Based on fact 1 we can conclude A. This, together with fact 2, leads us to infer B. B combined with fact 3 leads us to conclude that $X million might have been uplifted from the company.

As you will be communicating under pressure, complex reasoning chains are easily disrupted by potential hostile behavior of the other party and could have much less impact. Simplicity and clarity add power to the narratives.

Finally, although having an extensive investigative report with evidence files on hand is not a bad idea, there will be no time to look through the report during the meeting. You should summarize any key facts on a two-pager and create a one-page summary of the current understanding of the perspectives, positions and interests of the opposing party.

Prepare to Manage Hostility

You should understand in advance that you will be in a room with an opposing party who could be hostile. In contentious meetings the topics of conversation may lead to emotional entrapment or hostility. While it may be clear to you that the opposing party acted inappropriately, dishonestly or in violation of law, the opposing party may not recognize the bad behavior. You should be prepared for potential hostility from multiple angles, including:

• No matter how in-depth the investigation is, it is normal that the opposing party that allegedly committed the acts knows more than you do. Any misstep or inaccurate interpretation of a fact could trigger hostility or mocking based on your incomplete understanding of the matter. Moreover, these tactics could be used to take apart your fact base.
• You could be threatened, openly or implicitly. This may vary from threats of pursuing claims against the organization or its representatives personally to threats about your position vis-à-vis the party you are representing. Comments could include: “I will see you fired,” “Do you really think that your boss/client will like it?”, “You are dragging your company/client into a hole,” etc.
• Your advisors could be the focus of the opposing party’s hostility. The opposing party could allege that the advisors did not inform you of all the facts and circumstances. Comments could range from “Are you sure that you haven’t been misinformed?” to “What are they doing in the room? Either they leave, or we are walking out from this meeting.”
• You could be accused of insulting, lying and misrepresenting the facts related to the opposing party in the matter.
• Throughout the meeting, you will likely be interrupted and talked over.

While the likelihood for hostility in the first meeting is significant, you should firmly understand that you are in a room with opposing parties who could feel threatened, and you should be prepared to explain the facts in multiple ways. Opposing parties will likely not accept your view of the facts in the first meeting.

Best Practices for Managing the First Meeting

You should have realistic expectations about what you will potentially experience and accept the likelihood that you will be strongly disliked. Once you have managed your own expectations, you shall be much more emotionally robust during the meeting.

Your legal position and understanding of the issue should be as bullet-proof as possible. Careful wording is important. Keep to the facts, not allegations. You should find the right balance between legal correctness and the impact of your narratives. Facts should be arranged in a way to speak for themselves — when the degree to which you are informed about what happened is the key shock itself. Generally, facts are better than interpretations, which is also why inductive reasoning is advised. It is also highly advisable to check the legal imperatives of the environment in which you operate. For instance, there is variance in the thresholds of “defamation” across countries, and you should take this into account to manage the risks of counterattack on formal grounds.

If you are emotionally overwhelmed in the meeting, this will affect both the process and the outcome. Your messaging will be less clear, credibility will be reduced, and pressure from the opposing party will increase. Unfortunately, emotions are natural processes that cannot be really controlled. What you can control is your behavior in an emotional state. For this it is important to anticipate potential emotions in advance of the meeting, and to recognize your emotional state throughout the meeting.

Common emotions in these contentious meetings are anger and anxiety. Looking at the above list of typical situations, you can ask yourself:

• Which emotion is likely to arise?
• What are specific actions a participant can take to manage the emotions (breathing; taking a break; reminding themselves of the objectives, of the soundness of legal position and their understanding of legal environment, etc.).

Ultimately, you should have your own set of routines, but it is critical to think and visualize potential emotions and resulting responses in advance as it (1) helps you recognize the particular scenario and (2) reduce the levels of stress and emotional pressure. Collecting a library of potential contentious behaviors from past experience will aid immensely in preparation.

Finally, some tactical advice.

• Don’t allow interruptions. Once interruptions start they will never end, so it is critical not to allow this in the first place. It is good to negotiate due process on both sides before further communication. Of course, it is critical for you to comply with this as well, once the approach has been agreed upon. If the agreement is not to interrupt the other party, you can calmly highlight this and ask for compliance.
• Consider having several prepared “face-saving” speeches at the ready. The issue with allegations of fraud and dishonesty is that those who have committed these acts may have rationalized their actions. Often, your narratives in the room diminish this rationalization, which can create strong and unpleasant emotions and may trigger a strong emotional outburst. Face-saving speeches or narratives helping the opposing party explain the behavior, while keeping the facts of the behavior itself intact, can help reduce tension. Their use should be discretionary, depending on the situation in the room, but preparation in advance is key.
• Taking tactical breaks is OK. In competitive fencing, once the opponent is on a scoring spree, a fencer often interrupts the process by signaling a need to check/replace the equipment or tie a lace. The same applies here, and breaks can be used as a tool to re-group.
• Ensure that you have physical control of the environment — either in your territory or a neutral area. This has practical implications. First, this allows you to exit at any point in time, which is a significant comfort if things really escalate. Second, you will not be concerned with illegal wiretapping and recording, adding to perceived safety and, by extension, to peace of mind.

Decompression and Debriefing

After a meeting concludes, decompression and debriefing are critical steps, and in this order. Whatever your decompression routine is doesn’t matter, you should have one. Long exposure to contentious situations can be taxing on the overall psychological well-being of participants. Take a walk, meditate, spend time with family — but make sure to draw a firm line between what took place in the room and now.

It is also crucial to debrief and grasp as much as possible from the meeting.

• What have you achieved?
• What have you learned?
• What are the next steps?
• What have you done well?
• What could you do differently?
• What have you learned (process-wise)?

Such contentious meetings will never be easy, and they can’t be, by definition. But their role in overall conflict management is critical. Success and failure in these meetings will have a significant impact on the whole process (and its results). Through careful preparation, clarity of goals and emotional management, you can navigate them better. 

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