A Reference Model
for Distributive Self-Governance

My intent is to offer a reference model of self-governance to ease comparison among various organizational efforts or ideas. It is rough and highly simplified, perhaps even simplistic to those acquainted with the concepts. Still, I plan to use it as a baseline for my own strategy briefs that follow.

Strategic Intent

The function of the system will be solely to enable the self-governance of participants. Its organizational principles will involve only those necessary for self-governance. Its organizational concept, and therefore all structures that arise from it, will be an expression of self-governance. Finally, its agreements and practices will involve solely the conduct of self-governance.

By "self-governance", I mean the making of decisions by an individual, organization or group of such, which are binding on those that participate in making them. By "distributive" self-governance, I mean that decisions are made as close to the individual participant as possible while still remaining part of a coherent system of decision-making among all participants. This is similar to what some call “subsidiarity.”

The Power to Create

The reference model assumes that we begin with individuals who have the inherent right and responsibility to make decisions for themselves. Therefore, the system does not grant decision-making authority to participants, but rather it is the participants that cede some fraction of their inherent decision-making authority to the system. Otherwise the system would have no authority whatsoever over the participants. Fundamentally, the participants remain in authority over themselves at all times.

Similarly, the power to create parts of the system originates with the individual participants. This characteristic turns out to be very significant, and is exceedingly rare in most corporate structures.

In short, the system is created by participants (individuals or groups) voluntarily agreeing to be bound by a joint decision-making process, which itself was entered into voluntarily.

Initiating Agreement on Principles

The first agreement that participants enter into are the principles that all agree not to be violated in the conduct of self-governance. These are the principles against which all following agreements or structures will be judged. Whenever the participants work together (again, as individuals or as groups), they will:

• Respect participants’ rights and responsibility to:
  • Be who they are, and make up their own mind about things.
  • Protect what's important to them.
  • Work with whom and how they want.
  • Create new parts of the system, as long as they follow all existing and future agreements.
  • Be responsible for themselves.
• Interact respectfully:
  • Try to draw out the best in people; don't force them to do anything.
  • Try to meet people where they are.
  • Resolve conflict without violence or threat.
  • Freely and fully share information, while respecting confidentiality.
  • Keep promises, and don't make promises they can't keep.
  • Make decisions among those it affects, and without anyone dominating.
  • Entrust only as much authority to decision-making bodies as is necessary.
• Work together to create a system that:
  • Remain open and welcoming to new participants and ideas.
  • Works to ensure diversity of all kinds.
  • Doesn't play favorites.
  • Keeps decision-making, and everything else, as local as possible.
  • Nurtures the growth and development of participants and the whole system.
  • Makes sure everything hangs together as a whole.

These principles will be interpreted and applied as a whole. They are intended to balance and interpret each other. No principle shall be applied at the exclusion of others.

Enforcing Agreements

Participants must cede enough of their decision-making authority to enforce the agreements that they voluntarily enter into. This is an essential principle. No one will trust the system that cannot enforce its own rules. However, of course, the manner by which agreements are enforced must itself bound by the principles.

Participants

The model assumes that anyone or anything capable of entering into an internationally enforceable contract is eligible to become a participant in this system.

Organizational Concept

The organization is conceived as the simplest form of "upside down umbrella" organization. All participants are direct or indirect members of a single organization which holds the basic entry criteria and any universal agreements. New parts of the organizational system arise from two loci:

• The self-organization of members, in accord with the principles,
• The fractalization of the authority of the whole, ceded to subgroups of participants who have accepted the responsibility, in accord with the principles.

In conventional terms, it is built from the bottom up through the self-organization of members, and it is built from the top down through rights of subsidiarity. These two paths of creation are expected to mingle, blend, and harmonize. And, of course, the notions of "top" and "bottom" don't really apply once it is set in motion.

Governance of universal agreements requires consensus of the membership as a whole or the consensus of an entrusted governing body. For simplicity, "consensus" is defined as an 80% vote. Any other agreements, and their governance, must only conform to the principles.

Formal Agreement

There are many agreements that are consistent with the above concept, of course. However, for reference purposes, I will use those to which I personally seem to return as a starting point.

Membership corporation

All participants must join a membership corporation. The membership agreement is structured to create an enforceable, multi-party contract among the members. For reference, it is incorporated as a for-profit, but non-stock. (Ownership structure must be consistent with the principles, and therefore no structure that could allow one party to dominate the whole -- such as through traditional equity ownership -- is permissible.)

Related corporations

To form a distributed network, there must be other, similar entities with which to connect, and a means by which to connect. Related corporations much have a set of fundamental provisions (see below) placed within their governing instruments. (This provides the organizational equivalent of the Internet's TCP/IP protocol.) To simplify (I hope!) the discussion of the scaling properties of the organizational network, I will primarily use three terms to talk about different "types" of related corporations:

• Federation -- A related corporation that holds, governs and enforces a primary membership agreement for any number of participants. This is the "most inclusive part" for those members, that is, it defines with whom a member is in fact a member. The initial membership corporation is intended to clearly falls within this definition.
• Community -- A related corporation that is the result of the self-organizing rights of a group members. For the reference model, I will allow communities full rights to define their own boundaries, that is, they may or may not be open to the participation of other members within a federation.
• Society -- A related corporation whose members include federations. For example, the initial federation could join with other federations to form a society. In this way, societies reflect the rights of federations to self-organize, in accord with the organizational principles.

(Those of you familiar with systems theory or quantum mechanics might note that these definitions are highly dependent on one's point of perspective, as will become clear in any application of these concepts... ...if this wasn't true, it wouldn't be a very interesting distributed network...)

Fractals

When one related corporation takes on a power, responsibility or function, etc., that originally resided in another, I describe it as a "fractal of" that corporation. This is in part to fit with the organizational concept of growth, but also to allow a practical distinction between a community to which some of the responsibilities of a federation have been ceded and a community that only has responsibilities to the members who formed it.

(I apologize to any grammarian, mathematician, or anyone familiar with complexity theory, for my sloppy use of a term with a proud and interesting heritage. It used to irk me when people used the term imprecisely. Now I'm doing it! Such is life...)

Membership classes

This defines the relationship between a member (participant) and the membership corporation (part). The potential variety is probably infinite. To simply, the reference model focuses on three:

• Direct members -- Those who join a specific related corporation.
• Indirect members -- Those who automatically are considered members of one related corporation because of their membership in another.
• Group members -- When participation (i.e., any membership right) in a related corporation is intermediated through a self-organized group of members or a related corporation.

For the reference model, members in communities are indirect members of federations, and group members of societies (intermediated the federations).

Membership domains

This defines various grouping within membership classes, especially useful if some members have rights that other members do not or if there is a . Again, for simplicity, we'll focus on two:

• Individuals -- Natural people.
• Institutions -- Any entity recognized by local law to act on behalf of people, or otherwise have some or all of the rights of natural people.

(Personal aside: Does anyone know what the US Supreme Court was thinking when it ruled over 100 years ago that corporations should be protected by the same constitutional rights as people?)

Fundamental provisions

The bylaws of a corporation are its primary governing instruments, and hence define its nature.

• Purpose -- Consistent with that stated above.
• Principles -- Equivalent set, limiting application to policies, structures, ownershsip, etc.
• Fiduciary duty to both immediate corporation and to full network of related corporations. (This reflects the fundamental restructuring of corporate nature.)
• Right to join related corporations.
• Definition of the network of related corporations.
• Relevant member classes and domains, with pass-through provisions, when approparite. Base membership criteria.
• These fundamental provisions.

Governace body (corporate board)

• Powers restricted to governance of agreements.
• Nine member body, one each appointed by 10%+ of members.
• Changes in fundamental provisions require 80% vote of board.
• Changes in other governing agreements require two-thirds vote of board.
• Establishing or changing operating procedures require 50%+ vote of board.