Governance

Governance approaches that could be adopted within a contributionist organisation

Under contributionism, organisations are always governed by those that contribute towards an organisation. The ownership type determines which contributors will receive governance rights. Each governance right would have a certain amount of voting power. Voting power will determine how much influence someone has in each governance decision.

Temporary governance rights

All governance rights received for making contributions are temporary and do not last in perpetuity. A contribution needs to be fairly rewarded over the long term based on the value it provides. Governance rights should last long enough to give a contributor influence over how their contributions can be rewarded. Governance rights help to protect people's interests in the organisation.

Labour

Publicly owned and worker owned organisations would use labour to determine who receives governance rights.

Consumption

Consumer owned organisations would use consumer purchases to determine who receives governance rights.

Donations

Donor owned organisations would use donations to determine who receives governance rights.

Capital investments

Capital investments could receive governance rights when they risk losing the capital they invest. Financial investments are an example of an uncollateralised investment as organisations could spend the majority or all of the investment before the organisation fails. Giving a capital investor governance rights can help them with protecting their interests so that they have influence over how the organisation operates. In some cases this might mean governance rights that cover how the organisation is able to use the capital invested. Organisations with every ownership approach can benefit from capital investment. Capital investors could receive temporary governance rights in every type of organisation. Publicly owned organisations will usually receive their capital investments from the government so governance rights would not be necessary.

Voting power

Governance rights will give people a certain amount of voting power. Voting power determines how much influence they have in organisation decisions. If contributions are being used for ownership and determining governance rights the two main voting power approaches are one person one vote and proportional contribution value based. One person one vote would translate into determining what threshold of contribution is required for a contributor to receive the same voting power as everyone else receives. The proportional approach is where voting power is distributed based on the value of each person's contributions. Organisations could create a voting power approach that sits somewhere between these two options or that blends them together. Different decisions could use different voting power approaches.

Labour voting power approaches

One worker one vote

Each worker involved in the decision is given equal voting power. A worker would include anyone that is contributing their labour towards an organisation. An organisation may decide to require a certain threshold of contribution such as the contributor should be working full time or that they have contributed for a minimum period of time such as three months before they are eligible to receive their governance rights. A one worker one vote approach could be effective for organisations that want to operate with a more cooperative and simple governance structure. It also might be relevant for situations where there is not a drastic amount of difference in the amount or quality of contributions that each person is making. Contributors that prefer simpler voting structures and more cooperative environments may prefer this approach.

Labour value based

Each worker involved in the decision is given voting power that is equal to the value of the labour contributions they have provided. This approach can be effective for organisations where there is a big difference in the amount or quality of the contributions that each person is making or when the environment benefits from a more competitive environment. Contributors may also just prefer this approach if they want a competitive environment where the incentive structures more accurately reward people for performance and impactful contributions by giving them more influence in the organisation.

Donation voting power approaches

One donor one vote

Each person that donates to an organisation would receive equal voting power. The donor might need to reach a certain donation threshold value to receive any voting power.

Donation value based

Each person that donates is given proportional voting power based on the value of their donations. The more that someone has donated to an organisation the larger their voting power is.

Consumption voting power approaches

One consumer one vote

Each person involved in the decision is given equal voting power. In a market economy, a consumer would be anyone that has been purchasing the product or service that is offered by the organisation.

Consumer expenditure based

Each person is given an amount of voting power that is based on the amount they have spent with the organisation. Consumer expenditure based voting power would mean that the biggest consumers of the product or service would have the most influence in governance decisions.

Other voting power approaches

One person one vote

Each person involved in the decision is given equal voting power. A person could include anyone that has been contributing towards an organisation or that will be impacted by a decision. This approach could be suitable for situations where each person voting could be affected by a decision equally.

Based on the degree in which a decision affects someone

Each person is given an amount of voting power that reflects the degree in which it affects them. This could mean that a number of people are involved for different reasons due to how one decision could impact a range of people in different ways. As an example, if an organisation wanted to open up a manufacturing facility in a local area the decision to approve the construction of that facility might need approval from the people that will be affected by its construction. The facility might generate pollution or traffic congestion which could impact the lives of others negatively. Sometimes existing regulations and policies can handle these situations by making a defined process that an organisation can follow to seek approval. In other situations where the decision is more complex it might be necessary to involve all of the people that will be affected by the outcome of a decision.

Combining voting power approaches

The voting power approaches mentioned above could be combined together in a number of ways and weighted differently. For instance an organisation could use a one worker one vote voting power approach and partially combine this with a labour value based approach so that there is at least some increase in voting power for people who have contributed more than others. Alternatively another decision might use a labour value based approach for the majority of the voting power but give everyone a minimum amount of voting power by applying an element of one worker one vote. Another way that these voting power approaches could be combined is in situations where a certain decision could impact people outside of an organisation such as the construction of a new manufacturing facility. In these situations there could be a number of decisions that are handled by the local community. Each decision within an organisation could adopt a different voting power approach or a combination of approaches to more effectively and fairly govern the organisation. An organisation ultimately wants to make good decisions. Those that are relevant or impacted by the decisions will ideally be involved and be able to provide their input during a governance process.

Stacked voting power

One person one vote voting power approaches could be adopted in a few ways. The simplest approach is that it is always one person one vote for every decision. Another approach is that people's voting power could increase and stack based on the number of years they have participated. For a one worker one vote approach this could mean that a worker that has provided three years of their labour could be given 3 points of voting power instead of just 1 point of voting power. Any of the voting power approaches mentioned above could adopt a system of stacking voting power based on an increased amount of contribution or participation. An organisation might also need to consider applying limits to a stacked approach so that the influence of certain individuals doesn’t become too excessive. For example, labour based voting power could be limited to the most recent five years worth of contribution. This means that contributors that stay with the organisation beyond five years would not receive an ever increasing amount of voting power. Organisations need to self determine whether it makes sense to introduce stacked voting power and what limits should be applied if any.

Direct voting

In an ideal world contributors would directly vote on all governance decisions within an organisation. This means the organisation would be governed democratically between all its contributors. Direct voting could be an effective approach for smaller organisations, organisations where there is not a large amount of complexity in the decisions being made and organisations where the number of decisions is low. If these factors increase in scale or complexity over time it could become less practical to expect people to vote on all governance decisions.

Delegated voting

Delegated voting can be an effective way to increase the scalability and efficiency of handling governance decisions within an organisation. There are a few example variations that are worth consideration:

• Autonomous team decision making - A commonly used approach for scaling an organisation’s ability to handle governance decisions is to give teams autonomy to make their own decisions about how they operate and execute different tasks. An example could be an engineering team that is responsible for deciding on what tech stack they are going to use or a marketing team that is responsible for deciding how they will allocate their marketing budget across different marketing channels. This common approach for distributing responsibilities helps to distribute and minimise governance complexity as it prevents the need for every contributor to vote on decisions that they are less informed about or that they have less responsibility over.

• Optional delegation - Individuals could directly vote on certain decisions or they could delegate their vote to another individual to handle that decision. Someone may prefer to do this as they could have limited time to properly participate, not have enough context or experience about the decision or they might just prefer that someone else handles it for them. It’s advantageous to have systems that enable this behaviour as it is not possible to prevent someone from copying someone else’s voting decisions. A formal and transparent process for voter delegation means that the organisations could at least be well informed on how people are actually deciding to vote.

• Agreements & Bylaws - Agreements or bylaws could be introduced that ensure that other contributors have certain governance rights and involvement in certain decisions. For instance, workers could use these agreements or bylaws to give donors or consumers some guarantees on the involvement they will have over certain decisions in the organisation. This could be an effective approach for increasing the amount of trust between different contributor groups that both could have different interests and preferences.

• Appointed leadership - Leadership roles can be a way that certain responsibilities can be delegated to individuals or groups. Leadership roles could be selected in a number of ways. Workers could select another worker to handle certain responsibilities in a leadership position. Workers could also select a consumer or group of consumers to handle certain decisions. Another example could be consumers being given responsibility for selecting someone to fill a leadership position within the organisation.

Elected leadership positions

Elected leadership positions can represent an important approach for scaling an organisation’s governance process. Leadership positions could be seen as a form of forced voting delegation. Leadership positions would be given certain responsibilities and control over making certain decisions. This could be useful for situations where there is a difficulty in coming to an agreement and a group is satisfied with delegating this responsibility to someone who can handle the decision or due to the need to increase decision making efficiency. Elected leadership positions could be an effective way to limit the governance complexity that each voter needs to handle in an organisation. Founders or managerial positions can often have a large amount of influence over the direction of an organisation. Some organisations may prefer to operate in this manner out of efficiency or simplicity. Under contributionism, individuals in leadership roles would be elected by the contributors that govern the organisation. Leadership contracts could help to define the parameters, rules and duration of any leadership positions. Leadership roles might be get introduced for a number of reasons:

• Growing organisation - A growing number of contributors in an organisation can result in an increasing cost for everyone to participate in governance decisions. Leadership positions can be effective for removing some of this cost by delegating certain responsibilities to individuals.

• Growing complexity - The complexity of decisions could increase as the organisation scales or when it changes what it is executing. Higher complexity could put a large amount of responsibility and pressure on every contributor to be well informed and participate in these decisions. Leadership roles could help with isolating some of these complex decisions and giving someone or a group of people responsibility over handling certain decisions.

• Growing decision volume - The number of decisions an organisation needs to handle could increase as the goods and services being provided evolve over time or as the organisation grows and is handling more consumers.

• Competent individuals - Some individuals in the organisation could be highly competent and effective at leading teams or making complex decisions. An organisation may decide to trust these individuals with certain responsibilities to handle complex decisions.

• Highly competitive market - The organisation may operate in a highly competitive market where the efficiency of the organisation is of high importance. Leadership roles could help with delegating some of this complexity to individuals that can execute decisions more quickly.

• Simplify worker responsibilities - Workers may prefer an environment where their responsibilities are minimised so that they can focus on specific tasks they would prefer to spend their time on.

• Handling difficult decisions - Workers are not well incentivised to make decisions that are not beneficial to themselves. For instance workers may be reluctant to identify and introduce new innovations into the organisation if that meant some of them could be made redundant. Individuals could be elected into leadership roles that give them the responsibility of identifying and introducing new solutions and innovations.