Governance

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Working definition: Governance is a means of direct influence for an organization.

Generally, this involves selection (choosing by decision) and enforcement (enacting and reinforcing the choice).

Other possible elements include inquiry or research, sense-making or structuring, informing, polling or voting, feedback, and adaptation.

OVNs present a wide array of potential governance applications and scenarios, calling for the development of a modular pattern language which enables swift configuration of governance recipes to suit needs.



Function

  • confers permissions and privileges amongst actors in the OVN
  • addresses alignment of stakeholders within a space or venture
  • specifies mechanisms for decision making, including triggers for the process, steps to be taken, who to involve, and how
  • provides the structures through which objectives are fulfilled
  • monitors implementation of policies and decisions for compliance

Elements

  • decision model and free initiative (what types of decisions do we need to make)
  • governance mechanisms (ways to make decisions, and mappings to decision model)
  • governance structures (committees, offices etc. and mapping to decision model)
  • authority (granting specific people offices)
  • communication (recording and transmitting relevant and timely information)
  • accountability (for both making the decisions and the outcome of the decisions)

Features of peer governance

Openness

Openness is about access to governance processes. See more on the Openness page.

Rationale: In general, openness is crucial for enabling the large scale dynamic in which resources and collective intelligence reaches the network from all over the planet. When it comes to governance, openness is leveraged to include multiple perspectives into a decision making process. Openness is based on the principle of 'equipotentiality', assuming that any human being has the potential to add something positive to the organization.

Important note: At the same time, the governance process is a sensitive one and thus we need to consider it as a vector of attack. Openness in governance doesn't mean that anyone can come and make decisions about everything. It means that pretty much anyone out there can earn the privilege to participate in governance, which presupposes a fair process, providing equal opportunity to anyone. Access to governance in an OVN is granted based on past-looking considerations, we can call that merit or reputation, based on past contributions (time, money or any type of material or immaterial resource, tangible or intangible) - see more on benefit redistribution algorithm. It can also be granted based on forward looking considerations such as commitments. The second case is very present in DAOs where the commitment takes the form of staked tokens and it is enforced through smart contracts.

In closed governance systems, access to governance is granted by other actors, based on a process that relies more or less on their will. In open governance merit and future commitment are defined by an algorithm and the access to governance becomes detached from human intervention, once the algorithm has been decided (perhaps implemented as a smart contract if blockchain implementations as used like in a DAO). As a corollary, open governance assumes that these algorithms are also open (anyone can propose improvements), transparent (anyone can see how they work) and legible (they are easy to understand).

Transparency

Transparency is about access to information about governance. See more on the Transparency page.

Rationale: Transparency means that almost anyone out there can see, without the need to make a formal request for information, how the network is governed. This means unrestricted access to the operating rules (even to information about why and how these rules have been put in place), to past and current decisions, to governance processes and tools. Transparency is based on the principle of holoptism - ability for any part to know the whole, to have horizontal knowledge of what is going on, but also the vertical knowledge concerning goals and aims. The advantage is that all the nodes of the network can be aware of important choices / decisions, and of how obligations and permissions are assigned. Moreover, transparency builds trust in the system for participants, as well as for other agents that want to interact with the network.

Important note: At the same time, transparency provides real time information about important choices made by the organisation to competitive agents within the larger ecosystem, which can become a disadvantage. This is akin to the predator having access to the thought process of the pray, predicting every move even before it happens. The only defense in this situation of information asymmetry within a competitive environment is to become the lion of the savanna, i.e. to have no threatening competition in the area of the organisaton's core expertise.

Secret or closed organizations are based on non-transparent governance.


Decentralization

Decentralization is about autonomy of agents within the organisation.

Rationale: The idea is that good decisions are made by agents in context, based on local conditions. Providing autonomy, or the ability to make decisions and to play by own rules, in context, can lead to very efficient processes, assuming that these agents are aligned with the overall goals of the organisation and have the required competencies to act. We also need to take into consideration that part of the resources used within an OVN are under a private property regime (affiliates provide resources), which confers owners influence within the network. In other words, unlike in a traditional firm where all things belong to the company and all workers are not in possession of the means of production, in an OVN some affiliates are in possession of means of production. This reality makes it almost impossible to exclude these affiliates from governance, therefore centralized governance is incompatible with open networks. To expand a bit on this subject, within an OVN resources belong either to a custodian (bound by a nondominium agreement) as commons or are part of a pool of shareables or they belong to affiliates. Allocation of privately owned resources is a matter of individual informed choice or a matter of established rules in the case of shared resources. See more on Physical resource governance.

Important note: Sometimes peripheral agents making decisions based on local conditions are not aware of the big picture, and the network can loose its cohesion.

Non binary

Treat decision-making as a signal processing process. Voting is usually yes or no. When aggregated this provides only a vague information of actual preferences. New decision making methods and associated tools go beyond that. Examples are: conviction voting (Commons Stack), quadratic voting (Radical Exchange), rank choice, etc. Most of these methods are composable, which means that we can use them as basic decision-making patterns to build more complex patterns.


To be developed further...

Horizontal Forms

This is about instituted power relations: Within an OVN there are no formal mechanisms through which one affiliate can control another one.

Peer production processes are structured with the help of formal systems of roles or accountabilities (describes what members do) and reputation (describes how well members do what they do), through voluntary subordination. Peer pressure represents a type of informal feedback loop with significant effect.

Rationale: Instituted power relations shift the focus from optimizing incentives and processes to controlling agents, which is not the best way to improve innovation and production. Instituted power corrupts. People contribute to an OVN at will and act as free agents. They should also be mindful and have a responsibility to reduce friction to a minimum, to make the network dynamic and adaptive.

Important note: Some people misunderstand the situation and in absence of some form of instituted power exerted on them they try to dominate others. Lack of instituted power is felt as a power vacuum that needs to be filled. In these cases, the network should exert peer pressure over these individuals who try to impose their tyranny on others, using well-designed mechanisms that can detect such tyrannic behavior and channel and focus resources to reduce the influence of the potential tyrant. A useful metaphor here is an immune system, which detects a malfunction that can push the organism beyond its homeostatic range.

Free initiative

This is about one's ability to do something (initiate a process or contribute to an existing one) without the need for approval.

A good initiative is one that increases the probability to improve the organisation or its products, and by the same token increases the probability for additional benefits for affiliates. A "bad" initiative is one that causes harm to the organisation as a whole or to some of its affiliates. Sometimes we perceive as bad initiatives those that are not intended to cause harm, but might be wasteful (in terms of utilization of resources). Usually, this type of initiatives don't attract attention or resources to go forward, but there is no penalty for trying. The OVN is a Darwinian environment for ideas, in which the good ones get traction and the bad ones are neglected and forgotten. An good initiative that fails is still a learning opportunity.

Rationale: Reduce bureaucracy, lower barriers to innovation, agile, fail fast.

The governance model that takes free initiative to the extreme is called a doacracy, i.e. the power of doers, those who do, who take initiative.

Important note: Some actions require very little effort but can be harmful and even irreversible. Such actions are vectors of attack. In these cases free initiative should be closely watched, peer reviewed and potentially sanctioned. For example, publishing something that can tarnish the reputation of the OVN, using the OVN's brand in a harmful way, as if it is done in the name of the OVN, false representation.


Some conditions must be fulfilled in order for free initiative to become a benefit rather than a burden

  • The value system is transparent and legible, everyone can see the big picture.
  • A transparent reputation system is in place.
  • The digital environment provides tools for sharing and broadcasting new intentions and allows affiliates to monitor, discuss, contribute or red flag.
  • All initiatives are open to allow others to participate, to correct the development path, to provide alternatives, and even to red flag (oppose and stop).

It is the responsibility of the initiator to rally support and resources for his/her initiative. The individual choices of members with higher reputation will have an impact on other members. This is how skills, talent and capacity are attracted to the process.

The advice process

Free initiative is related to the advisory decision making process, where anyone can make a decision if

  • the individual seeks advice from experts
  • the individual seeks advice from those who will be concerned by the decision

The magic of the advice process is that the person making the decision is entirely responsible for the decision and its outcome. This concentrates the mind, and forces them to really seek out advice and pay attention to it, because ultimately it’s their decision and the network (which hopefully includes people they like to get on with) will have to live with the consequences of that decision.

Important: this is about getting feedback/input into your decision, not about building consensus. Do not use the advice process to try and browbeat people into agreement or to build political support for your decision. You don’t need people to agree. You don’t need political support. You just need input to make sure that you make the right decision.

This is a decision model that works very well to replace both the top-down decision model and the consensus-based decision model, both of which have serious flaws in practice and theory both.

Temporal aspects

With respect to decisions

Some decisions can be definitive. For others, evaluation processes should be attached to the implementation of the decision, which might invalidate the decision at some future date, or trigger revision and adaptation of the decision. -Proposed by Steve

Some decisions have an expiration date.

When it comes to agreements, they may have temporal clauses that trigger other processes. Smart contracts are programs that can have temporal parameters.


With respect to access to governance

Past-looking and forward looking considerations may be taken into account for granting access to governance. In other words, an agent's past behavior / contributions or a future engagement / commitment are indicators to consider when designing governance.


Preference voting (proposed by Commons Stack is a continuous process whereby agents post their preferences to certain issues and can update them over time. This builds a profile of organizational preferences and informs at all times the path of minimal resistance.

Levels of participation aspects

OVNs exhibit a long tail distribution, or a 1-9-90 structure, where 1% of participants in the network are core (entrepreneurial), 9% are contributors (early adapters), and 90% are occasional contributors (followers). OVN affiliates have different needs and interests, depending in which one of these 3 groups they are situated. They can also migrate between these groups. The level of openness of the network is in fact related to the mobility between these groups.

Governance must be sensitive to this universal long tail structure of OVNs. Those in the core group, the 1%, bare more responsibility and have a much larger workload on their shoulders. They are also very concerned by the viability of the network, therefore their decisions will be motivated by maintaining or improving the health of the network. Contributors, the 9% group, want to help, but are not fully committed. Those in the 90% group share the same values and act as a bridge between the network and its surroundings. It is important to understand how to compose a decision making body for a specific type of decision. See more in the following video : Samer Hassan on Online Tools to Increase Participation in Collaborative Communities.

Roles

Governance is a process and a governance system requires maintenance. Affiliates can engage in these processes and when they do, they need to understand that they are playing a specific role.

With respect to the process of governing we can identify key functions. Some of these functions can be embedded decentralized processes, some of them can be embodied as individual roles. We come from a social order where these key functions have been embodied. For example, we immediately think of leadership in terms of a person, instead of thinking about it as a process that can be entirely disembodied, or can be embodied but largely distributed (shared across a number of individuals). Think about the Bolshevik revolution of the Black Liberation movement in the US. You'll most probably see flashing the images of Lenin and of Martin Luther King. Now think about the #occupy movement and most probably you'll not have a human figure that you strongly associate wit that movement. In decentralized and distributed movements or swarms leadership is either a shared individual roles (many local leaders in coordination) or it becomes an embedded process, totally disembodied.

Key functions

  • coordination: fulfilling temporal and spatial requirements and dependencies between processes that form an action.
  • responsibility, accountability: related to determinism of a process, increase the probability of something planned to happen, as expected.
  • mission, vision and purpose: alignment of goals, reduces dispersion and waste of resources, diminishes the field of exploration.
  • motivation: source of inspiration, emotional.


In the open world we see roles such as: leaders, stewards, facilitator, coordinators, ...

Access to governance

See also the section on openness.

The problem with open systems is that their contribution statistic follows a long tail distribution. This means that there is no clear delimitation for who's in and who's out, but rather a continuum of engagement, commitment, participation intensity. The question now becomes who should take part in decision making? Should someone who has made a small contribution, long time ago, be included? Should those who are contributing a lot, at the moment of the decision, have more influence?

The main goal is to create organizations that are able to make good decisions, in effective time. Based on context, groups must design access to decision making that brings in the people who can make the best decision, taking into consideration potential conflicts of interests and different types of social dynamics. For example, in some cases it is wise to bring into the decision making process distant stakeholders that are not active in the venture, just to get their outside opinion or perspective into the decision. They may be more inclined to preserve the general purpose of the network. If the decision requires technical skills and local/contextual knowledge it is wise to invite people who have an informed and up to date opinion. If the issue is time sensitive, those who are in it at the moment might be the best ones to include.

The [NRP-CAS] collects activity and can be used to algorithmically filter participants in decision making, based on the type of the decision. We call that the Governance equation.

Layers of governance

Sensorica and Metamaps are working on governance documents.

Examples from Sensorica

Network of networks governance

The OVN structure is fractal. We can see an OVN as a network with nodes (can be other OVNs) that share protocols and standards to enable open and collaborative innovation, production and distribution processes. But at the same time, this network-of-network level is also the ecosystem level, en environment where there are interactions with various type of organizations: other networks, government, market, suppliers, benefactors, etc.

Network of networks governance is like an international treaty, it governs the behavior of entities part of this ecosystem, it regulates their relationships.

One important concern at this level is the body of protocols and standards for

    • Contribution accounting and transactions/exchanges - creating interoperability between ventures in different networks that are considered as autonomous open business units, and between all the organizations interacting within the ecosystem.
    • Role system and Reputation system - roles and reputation need to be transportable across networks, beyond organizational boundaries,
    • Content management - creating documentation that can be effectively shared and used beyond organizational boundaries,
    • Physical and virtual environment - creating a unified user experience beyond organizational boundaries,

Network governance

Networks are clusters of interests. As social systems, they have their own identity and culture. They are also considered as loci of knowledge and know how, with specific capacity for design, production and distribution. The governance at this level is greatly influenced by the identity and the culture of this specific network, by its mission(s), as well as by the nature of its value system, i.e. the type of resources used, their availability, the nature of its internal processes, the relations it has with its environment (government, market, suppliers, benefactors, etc.).

At this level, governance is concerned with

  • Custodian agreement (see Legal structure)
    • issuing and revoking the mandate of network Custodian to a entity
    • defining its roles and its responsibilities
  • Network Exchange Firms
    • issuing and revoking the mandate of network Exchange firms to a legal entity
    • defining its roles and its responsibilities
  • Access to Resources (physical and virtual spaces, tools and equipment, consumables, use of brand, etc.)
  • Governance equation at network level
  • protocols and standards for
    • contribution accounting and transactions/exchanges - creating interoperability between ventures within the network, considered as autonomous open business units.
    • role system and reputation system - roles and reputation need to be transportable across ventures within the network
    • content management - creating documentation that can be effectively used across multiple ventures within the network
    • physical and virtual environment - creating a unified user experience across the network

See also Physical resource governance page. It describes the governance of physical spaces, tools and equipment as well as consumables.

Venture governance

Ventures are governed independently within a network. They are seen as open, collaborative/participatory enterprises. At this level, governance is concerned with the distribution of benefits, which is regulated by the Benefit redistribution algorithms and is enforced by a Benefit redistribution Agreement. See also Governance equation at venture level.

Embedded governance

Embedded governance (or immanent governance) is about engineering the environment in which action takes space to direct, channel or shape action, to take away the possibility of undesirable or less desirable action alternatives. The true act of governance is the decision to shape the space or the process in a given way, which will subject all actors to that particular design. Once that design decision has been made and it has been implemented, the rules become embedded or immanent. For example, if we don't want people to walk into a certain area, we put up a barrier. The barrier can be suggestive (a ribbon) or a hard physical barrier (a fence).

OVNs rely on stigmergy, which in turn relies on embedded governance. In other words, in order for OVNs to scale, we believe that most of the rules need to be already embedded in the design of the OVN's physical and digital space, as well as in its methods and processes.

Onchain and offchain governance

Onchain governance refers to smart contracts, which are self-enforcing programmable rules, i.e. programs that are implemented on blockchain-based infrastructures to execute with certainty whenever certain conditions are met. A bundle of such smart contracts form a Distributed Autonomous Organization (DAO) or Distributed Autonomous Corporation (DAC). Offchain governance refers to the residual rules and decision making process that are not automated in such way and rely on human action.

There is a raging debate about DAOs and onchain/offchain governance, about how much automation we can have, how much governance can be onchain and if there is a necessary requirement for offchain governance for an organization to exist.

Governance components

Registries

Registries are lists of important elements used in governance. For example, the registry of affiliates is a list that contains all current affiliates of the OVN. Other governance modules can use this list, for example when it is time to make a decision, only those included in the registry of affiliates will be considered for participating.

Often used registries

  • List of affiliates
  • List of events (pas and future) - important to verify that the event baring the OVN's name is sanctioned by OVN affiliates.
  • List of legitimate funding proposals - important to avoid random people sending funding proposals in the name of the OVN.
  • List of ventures - important to verify if venture is truly developed within the OVN.
  • List of digital services used by the ONV - important is one needs to know if an online service or application truly belongs to the OVN

Decision making tools

Examples of decision making methods and tools

Body of agreements

Can be a body of smart contracts, paper contracts and a mix of both (See the Embedded and non-embedded governance section).


Tibi's view on governance

by Tibi

Rules and norms are solutions to a specific category of organizational problems. Organizations develop different types of problems as they grow and as they undertake more complex endeavors. Some of these problems are of governance-type. Setting up new rules must respond to an organizational problem [use a problem - solution pattern to propose and design new rules].

Every organization has its own specificity and transposing governance from one organization to another one is not so straightforward, especially without considering established methodologies and infrastructure.

Governance must be developed in parallel with infrastructure (tool, seen as technological solutions to a specific category of organizational problems), methodologies (processes seen as solutions to a specific category of organizational problems).

Fluid p2p governance

A new type of Governance system proposed by Tibi. Open document.

Work in progress

Sensorica is working on OVNi 3.0 Governance, an improved version of Sensorica's governance, compatible with a p2p IT infrastructure. open working document.

Tools

Deontic Ontology

Fundamental concepts and relations that allows us to speak about decisions, rules, norms, obligation and permission, ...

      • ToDo***: We need to integrate the REA ontology used for modeling economic processes.
  • Agents (individuals or organizations)
    • Individuals
    • Network
    • CELL (or Node)
    • Custodian
    • Exchange Firm
    • Consortium
    • Partner (organization of individual)

Operators: Obligation, Permission We can derive Access (to benefits or resources) from Permission?

  • Resource:
    • Physical: materials, tools, equipment,
    • Virtual

Deontic logic

A type of logic if the field of philosophical logic that is concerned with obligation, permission, and related concepts. Alternatively, a deontic logic is a formal system that attempts to capture the essential logical features of these concepts. It is useful to formalize governance and embed it into processes, automate governance (see Embedded Governance and Onchain governance sections above). More on Wikipedia. See also This paper.


See also

External links