I wrote this to go hand in hand with the roadmap. Feel free to put it in, or edit it to go in the roadmap if that is of use. Do as you wish.
It’s just my research and analysis of some options for governing the Cardano Foundation that I hope will be considered because naturally I am biased to think my own opinion is great.
I post here in the forums because it’s not so easy to publish in telegram, and I think it’s important to discuss.
This is my opinion: I could provide multiple sources and tangents to back up my arguments but then this turns in to an academic article which is impractical to read. I tried to keep things fairly concise which leads to unclarified assumptions. Feel free to challenge me.
What is governance?
Governance is the management or control of the activities of a social system. The social system can be a nation, a territory, a corporation, a tribe, a family etc, or as in our case: the Cardano community and/or The Cardano Foundation.
Why is Governance needed?
I would argue that within any social group of two or more social animals there is some kind of unwritten or unstated ‘governance’ between them, for example ‘Social dominance theory’ is a form of hierarchal ‘governance’ by my interpretation of the definition of ‘governance’. Without a governance model in place then what occurs is some form of Social dominance theory (which includes cult of personality). Depending on the unelected leadership (those most dominant will control more), the outcomes will on average lead to bias, and substandard or/and inefficient results for the community as a whole.
The goal of Governance
To increase efficiency of production, and increase benefit to the community as a whole when compared relatively to zero governance
- Measuring community benefit from proposals/initiatives/actions.
- Too bureaucratic a model can be stagnating and can provide worse results than no governance at all.
- Human bias / incentives and conflict of interest between the governors and the community
- Politics / hierarchy. Challenging those above you is not always the fastest way to get promoted. In fact it’s the best way to get fired (Ben?).
- Transparency - It is impossible to assess bias and progress when policy is made behind closed doors.
- Communication issues between groups of workers working on overlapping problems, leading to inefficiency.
- Defining the majority. If a proportion of voters vote that they benefited, and a proportion voted that they didn’t. What % is required to consider that proposal passed or a success. This refers to all voting whether that be a board vote or a true democratic vote by the whole community.
- Being flexible. Being willing to change. If things aren’t working, and that is established in some form or another, don’t continue to progress with the proposal because of timeline pressure or other bias.
- Accountability. Who is responsible for what. If someone is paid to do a job and the decision makers (board or community) conclude significantly that the job was done badly, do we let this person or people continue in their roles or do we replace them. On the other side: if one can be sacked from a role very quickly and there is no security or room to improve and learn from mistakes then it’s a lot of pressure and then it becomes not the most comfortable or attractive environment to work in.
- There is currently a restriction of 7 or 8 board members on the foundation. Does the board require a proportional or unanimous vote. Will the CEO decision outrank the board?
- Expansion. the governance model needs to allow expansion of contributing members. Encouragement of individual members of the community to use their skill set. The community is bigger than the largest corporation. That’s a lot of untapped potential all willing to help. We don’t want to be constrained to an old corporation model with a limitation of workforce. Working from home digitally it is possible to unlock talent from a massive community pool workforce, as we see with the roadmap. This workforce could be much bigger than a corporation, and even bigger than a nation, if there was a system of governance that allowed expansion without increased bureaucratic dis-economies of scale issues as with the typical nation states.
- Remuneration for work / Incentive to work, which doesn’t have to be monetary. For example: I am reluctant to contribute more than I have to this because I don’t trust what I’ve done will be used or useful to the current management.
- I heard Charles mention that Bip’s don’t get passed. Why is that and why would CIP’s be different?
Some relevant types of Government/ political philosophies
By first use definition Anarchy is “an absence of government”. But then the definition goes on to contradict itself advocating ‘self-governed’ societies opposing authority or hierarchical organisation in the conduct of all human relations. By my interpretation, I would argue that there has never been ‘true’ anarchy because of ‘social dominance theory’.
I want to differentiate what I call ‘true’ democracy, where all the community have the option to vote on every decision within the community, vs ‘False’ democracy where the community get to elect an official who decides what is best for the community. ‘True’ democracy is the closest to Anarchy. The difference being that the people govern themselves, whereas in Anarchy by definition there is no governance, which personally I don’t think is possible as argued above.
The governance and decision making rests with a small number of people. This is the current CF model with 7-8 board members.
A form of government characterized by a single leader or group of leaders. Nation dictatorships have a bad reputation, but I haven’t heard any one complain that the CEO model can actually be a dictatorship and probably is most of the time.
Meritocracy is a political system in which economic goods and/or political power are vested in individual people on the basis of talent, effort, and achievement. Most corporate entities like to think of themselves as meritocracies, but I would argue any system with an unelected hierarchy can not be a true Meritocracy, due to bias.
- In this system, fundamentally there is a constitution above all else, which Cardano Foundation already has here : https://cardanofoundation.org/en/our-missions/ As a side note why is this constitution not democratically voted on.
- There are circles (i.e. teams/bodies/offices/departments) whom are responsible for a set of roles. Some circles will contain sub-circles, and all are contained within the largest super-circle, usually called the “General Company Circle.” a written constitution. I do not understand how this is significantly different from the current ‘managers’ and ‘directors’ model already in place at CF.
- Particular roles allow the authority to carry out certain tasks and pursue particular aims, and a set of “accountabilities” that clarify what is expected of them. When the responsibilities attached to a role become too much for one individual to carry, that role may further need to break itself down into multiple sub-roles, becoming a circle of its own.
- There are elected ‘facilitators’ (managers/directors/board members) who are mindful of the steps set out in the Holacracy constitution…
- Holacracy’s approach to governance is democratic tension-driven, meaning that issues are added to the agenda when any team member senses “a gap between how things are and how they could be." A tension could be a problem something that’s not working or an opportunity that is not being harnessed. In governance meetings, typically held monthly, team members can raise specific tensions around roles, accountabilities, decision-making authority, and expectations of each other.
- Holacracy is less like a governance model, and more like a decision making structure for a community. It doesn’t seem different to a standard Government model or a Corporate model. For example, the different departments/body/offices of governments in the UK (whom could be considered circles of teams in Holacracy) work under an elected ‘facilitator’ or group(the cabinet in the UK), whom should be making decisions from a constitution. Or as in a corporation; there are team leaders (HR and Marketing circle) who are the unelected ‘facilitators’, whom assign tasks (sub circles) to different groups of minions or smaller team leaders.
I.e. there doesn’t seem to be anything particularly new, but it’s been wrapped up in a new name accompanied by a lot of fundamental assumptions about human behaviour/consciousness that aren’t objective. A lot of mindfulness.
- The ‘tension driven’: issues that are added to the agenda when any team member senses “a gap between how things are and how they could be." is essentially the community roadmap, or CIP’s.
- The ‘Integrative Decision-Making Process’ shown on page 5 of the Holacracy whitepaper is a good structure if needed, but is in essence a debate or a discussion. I’m not convinced a group of intelligent people really need it.
- There are also a lot of fundamental problems that CF has that still aren’t solved by this system like for example: Individual bias, True accountability, transparency, communication between overlapping roles, and if an objector and proposer can’t agree on a proposal, and there is no hierarchy how can a decision be actioned. Who assigns what team to that proposal. Do they arrange themselves? Because that also creates social dynamic problems where some group may not want to do one job or too many people might to want to contribute to another job potentially leading to diseconomies of scale.
DAO (Digital Autonomous Organisation)
I believe this is a topic suited to the more technical than I. I trust in Voltaire and Dor Garbash’s project catalyst - It looked amazing in the summit. But to give some quick summations:
There seems to be a proposal system in all decentralised governance systems. Whether that be less formal as in forum requests, or more formal as in (Cardano improvement proposals) CIP’s, BIP’s etc.
Dash has an on chain vote for these proposals. The proposal(s) with the most votes get passed first, the quantity of proposals passed depends on the block reward, with a reset every month.
- The problem with any voting system is that it requires the Cardano Foundation to be legally obliged to act upon the passed votes in order of priority suggested by the community. Otherwise we have a system where there is true democracy, but then it’s held back by Bureaucratic Oligarchy.
Web3 / chainlink governance
I heard cries that CF should be like Web3 etc, so I tried to find governance models for these organisations, but they seem to be unelected councils/boards with no democratic system implemented yet.
I heard cries that CF should try to be like Amazon, Google, Apple etc,
Arguably Silicon Valley has more progressive and modern governance models than the typical venture capitalist corporation. To sum up what I can gauge; there seem to be more ‘teams’ working together on a project as opposed to an individual manager Not dissimilar to the Holacrazy model.
But they have a committee (are they elected?) whom votes to choose the executive board. It’s an old fashioned model and I don’t have an interest in delving deep in to the workings of it, as I see a quite obvious alternative solution with Voltaire.
- We have a new situation, where a system is being built (Voltaire) that will allow ‘true’ democracy. Cip’s can be presented, ideas and roadmaps can be presented whether formal or informal, and proposals can be prioritised with a vote, as in the case with Dash. If we have to wait long for Voltaire then more simple voting mechanisms can be used in the interim. A true democratic vote removes individual management bias and the questions about ‘does this benefit the community as a whole’ because the community as a whole chose the proposals. The vote removes a lot of bureaucracy because in fighting and decision making about the specifics of a proposal can also be broken down and voted on. It’s simple - the vote rules. Sure that might lead to a lot of voting but i’m happy to vote 10 times a day on basic things. A vote on multiple issues doesn’t seem more bureaucratic than a bunch of corporate board and team meetings. But it seems that those in power are scared to implement such a revolutionary system and instead seem to be biased towards more traditional methods like CEO’s, oligarchy, and Holacracy which as I argued isn’t a decentralized or revolutionary system in my opinion.
- What a vote doesn’t solve is Oligarchy and transparency of a governing body. Hierarchy, communication issues, and accountability. A ‘constitution’ can to be made preferably with a vote, but without full transparency of the workforce and governing body, it is impossible to democratically assess who is accountable. There therefore needs to be progress reports for each team (and maybe even each individual) about what work they did on a proposal. The outcome or even progress of the proposal can be rated with a vote as well similarly to amazon products, and that in itself is a great form of democratic accountability: Responsibility and bias of managers is completely removed.
- There are still issues such as how does a team go about implementing the proposal if the proposal does not strictly detail it, and the ‘Integrative Decision-Making Process’ shown on page 5 of the Holacracy whitepaper is a good structure if needed, but it is in essence a debate or a discussion. I’m not convinced a group of intelligent people really need to follow that structure. Are people in business really that lacking in decision making skills? Probably yes.
I envisage that the community will eventually become the workforce, as is the case of the roadmap currently. We have multiple workers and cliques all contributing in different avenues. If a rating system was added then it’s trivial to add a remuneration system based on those ratings for the job achieved, and over time we will find who the lower rated teams are and they will simply be filtered out over time because they will not be selected for the proposals.
- ‘True’ democracy is the only way forward in my humble opinion. Yes it becomes bureaucratic if there are too many votes, but I’ll happily vote 10 times a day on various issues/proposals. I’ll predict now that if you install Holacracy, or appoint ‘experts’ in the field of traditional governance, or any other Oligarchy wrapped in nice buzzwords then you will still have the problems of old.
- But if you insist on appointing an expert (as is the case with peer review) please investigate organisations like this before you approach Holacracy founders: