Temporary governance rights

Temporary governance rights should be awarded to all contributions that match the contribution ownership type.

Principle

Temporary governance rights should be given to all contributions that match the contribution ownership type.

Governance rights

Governance rights could give contributors voting power for a variety of different decisions. An organisation with more contribution based governance should mean the contributor receives a proportional amount of governance rights that reflect the value of the contribution they made. Organisations may also agree on other structures such as one person one vote if they prefer a more cooperative approach. If an organisation was owned by its workers then labour contributions would be what is used to determine who gets what amount of governance rights. Some examples of the type of rights that organisations could have:

• Right to use - Contributors can collectively use their property as they see fit within the bounds of the law. This includes using assets to produce goods or services or for personal enjoyment.

• Right to transfer - Contributors have the right to sell, lease or give away their property. This includes transferring property through sales, inheritance or gifts. Contributors might also be given the right to sell their governance rights to someone else.

• Right to exclude - Contributors can prevent others from using or interfering with their property. This is fundamental to maintaining the exclusivity and control of owned assets.

• Right to modify - Contributors can alter or modify their property, such as developing land or renovating a building providing it complies with any legal constraints.

• Right to modify the organisation - Contributors would be able to collectively decide on any changes to the ownership, governance and incentive structures that are adopted in the organisation. Contributors would have the right to vote on any of these changes.

Mixed governance structures

Organisations may decide to delegate some of the governance rights to other individuals that are relevant to the organisation for a number of reasons. For instance a charity could be owned by its workers that operate the organisation. Those workers could decide to give governance rights to the donors to decide what should be prioritised so that they have a say in how their donations are used. Workers would keep the governance rights to determine how they want to operate on a daily basis. This mixed governance structure could be beneficial for increasing trust in an organisation or resolving any misaligned incentives that might exist.

Problems with perpetual governance rights

Under contributionism, contributions are respected and awarded with governance rights. The problem with the approach of constantly awarding governance rights to recent contributions is that the longer an organisation has been operating the more that perpetual governance rights could become problematic. Perpetual governance rights have the following issues:

• Creates a perpetual ownership market - If governance rights are perpetual someone would be able to buy governance rights and have perpetual influence over how an organisation is operated. This person could have no involvement or understanding about how the organisation is operated and not be aligned with the preferences and values of the contributors that are actively involved in the organisation. Temporary governance rights help to limit the impact of a secondary market forming as older governance rights will eventually lapse and new governance rights would only be given to people that have recently contributed.

• Dilution of future contributions - Perpetual governance rights results in the dilution of the amount of influence that future contributions would have due to an ever growing amount of historical contributions. Over time these historical contributions would represent a larger percentage of contribution than the recent contributions. Historical contributions need to be able to protect their interests until they have been fairly rewarded for their contributions. The older these contributions are the less relevant they become to the organisation and how it is being operated today.

• Increased governance complexity - Perpetual governance rights could result in an ever increasing amount of people that are involved in governance decisions. Many of these people might not be actively involved in the organisation anymore. This can increase the complexity of the governance process and could lead to suboptimal decisions if older governance rights are not fully informed on what is happening in the organisation and about the surrounding environment the organisation is currently operating in.

Many contributions might be suitable for receiving temporary governance rights

• Capital - Financial capital investments could be a good example of a contribution that could benefit from receiving governance rights as the organisation would use or spend the capital that gets invested. If the organisation fails the investor could lose all their capital which warrants them having governance rights. This could give them some influence over how the organisation is operated or how the capital is used. What exact governance rights are given or whether they are given at all is up to the organisation that is making the agreement with the investor.

• Consumption - Consumer owned organisations could use consumer purchase contributions to determine and distribute governance rights.

• Donations - Donator owned organisations could use donation contributions to determine and distribute governance rights.

• Labour - Worker owned organisations could use labour contributions to determine and distribute governance rights.

Not all contributions need to receive governance rights

• Contributions not relevant to the ownership type - If the organisation is owned by its workers the consumption and donation contributions wouldn't need to receive governance rights. Similarly if the organisation was owned by consumers or donators the other contributions types would not be eligible for governance rights.

Respecting historical contributions

Governance rights could last for multiple years and give someone a prolonged influence over an organisation. This can be important in situations where the full value of someone's contributions are difficult to know ahead of time or at the point they make the contribution. The impact of some contributions could take multiple years to be realised. For instance, if a group of people were working on an innovative and novel new product it might take multiple years before this product gains traction. Due to this it is important that their initial contributions are respected over a sufficient period of time so that they can receive the full value of their contributions. An organisation will need to decide how long it could take for this value and impact to be realised. It could be effective for someone to receive governance rights and compensation rights to ensure they are able to influence the decisions about how historical contributions are rewarded when the organisation is ready to do so.

Respecting recent contributions

Governance rights need to eventually lapse once the full value of the contribution can be compensated. If governance rights are perpetual the recent contributions would get increasingly diluted due to a growing amount of historical contributions. This results in historical contributors becoming increasingly influential in how the organisation is operated even though the recent contributions represent who is currently contributing towards the organisation and ensuring it succeeds. Respecting recent contributions means that a balance must be struck between respecting historical contributions that have not yet had their full value realised with the need to also respect recent contributions by giving them influence over the organisation that they are responsible for operating.

Social governance

Social governance could be an important part of operating an organisation that is trying to operate in the best interests of the communities it serves. Some of the decisions that an organisation makes could have a wider impact than for just those that are contributing towards the organisation. In these situations it is often the responsibility of regulation and policy to influence how those decisions can be handled. Sometimes these regulations and policies might not exist yet and the organisation may need to decide whether it makes sense to delegate a certain decision to a wider audience so that they don’t negatively impact other people due to their own decisions and actions.

Compliance with this principle

All governance rights should have an eventual end date so that they aren’t valid in perpetuity. Governance rights only need to last long enough for the contributor to protect their interests so that they can receive the full value from their contributions. Any additional clauses and policies should be clear such as whether the holder is able to sell their rights to other people. If governance rights can be sold, it will be important for people to know whether there are any changes or restrictions to those rights for those people that have bought them.