Dance to a Different Tune on a New Dancefloor!
Unstitution is delighted that Graham Boyd, from Evolutesix, the founder and pioneer who developed and shaped the FairShares Commons (FSC) over many years, joined us as an Unstitutionist, and is guiding our Governance Stewardship. Our ongoing collaboration is helping us collectively make progress toward our challenging overlapping missions and deep commitment shaping and supporting life-affirming regenerative ecosystems and a society that works for all.
The potential here goes way beyond us — enabling so many amazing people, initiatives and entities to establish the conditions needed for interdependent mission-critical work to become resilient and flourish.
“A FSC is designed to meet the needs of multiple stakeholder groups (not just investors). It operates legally (with existing company law) to protect and enable the regeneration of all capitals that all stakeholders contribute (human, intellectual, social/relational, natural, manufactured and financial).
The ultimate driver for this is to create the conditions for a regenerative and circular / net positive economy to rise to our global challenges, (by protecting and enabling the regeneration of the common pool resources that each organisation and community uses, governs, manages and grows.)” ~ Graham Boyd
We have defined the legal incorporation pathway for Unstitution — patterned as a FairShares Commons with a governance and operating framework that will enable us to uphold our seriously/playfully articulated operating principles.
Co-catalyzed purposeful coalitions, pilots, ventures and initiatives can also benefit from a similar bespoke governance framework. As an Unstitution steward, Graham will be able to guide the right pattern or legal structure — tailored according to the purpose and nature of the work — for other coalitions and entities as ecosystem development work unfolds.
An overview
“Being a legally formed FairShares Commons entity, or as a DAO, increases standards of inclusion and equality between the different stakeholders, enhancing fairness and appropriate distribution of value and power.
FairShares Commons provides a sound foundation for any viable regenerative entity and cluster of initiatives because it can build connected ecosystems based on multicapital models. The integrity of purpose and principles are hardwired, whereby all key stakeholders govern and benefit from successful outcomes and impact.
The legal FairShares Commons framework, enables all stakeholders to share the rights and obligations (power) to govern the entity (or coalition) and the multicapital value/wealth generated. So all stakeholders work together to always find ways that meet core needs, including those of society and the planet.
Add in freedom from any concept of property, where the entity and its people cannot be bought or sold, and ensure stewardship roles to safeguard the interests of future generations — and the FairShares Commons becomes a demonstrated living, operating reality.”
The back story
Conventional business organizations are the usual formal legal structures around which work gets done in society. Most of these are primarily formed around the needs of one stakeholder group (e.g. most often investors or sometimes staff), and are also internally structured to operate as hierarchies. We’ve all experienced the limitations as well as the waste and toxicity of many of these conventionally designed and operated organizations. Nevertheless, these have continued as the predominant form throughout the industrial revolution. (NGO organizations, formed around the needs of a client/constituent stakeholder group of society, can fall into similar patterns, driven by needs for funding and funder stakeholder entities.)
Important to note — B Corp certified companies, benefit corporations and employee-owned companies have made good progress. However, their governance does not yet go far enough to enable and protect legal personhood, deep ecosystem-layer investment and development or safeguard the interests of future generations.
We’ve also observed the proliferation of various distributed networked groups. Loose, collaborative affiliations, collectives, networks, meshworks and alliances are great. While they help to build connections, relationships, communities of practice (CoPs) and provide some informal mycelium connective tissue between groups, organizations and initiatives — they often remain fairly amorphous. Some evolve into more formal partnership agreements and terms of engagement. While these specify some mutual expectations, relationships are often transactional. Potential for deeper collaborative interdependent investment, innovation and development, can be limited.
While networks are wonderful and important, there are real limitations. People come and go — lots of start-stop — fluid and shifting priorities create difficulty gaining and sustaining momentum. The stakes are generally low. And networks are not designed to work as work systems.
A compelling overarching driving purpose is a key step that provides some real stakes and glue that binds. An Evolutionary Navigation Strategy that guides direction helps to make progress toward common goals. Indeed, Unstitution builds these elements into the coalitions and initiatives that we co-catalyze and co-convene. However, these elements alone do not necessarily provide quite enough form to support the needed function.
Boxed-in hierarchies and loose networks often sub-optimize for very different reasons.
A viable alternative governance and operating model and structure
There’s been lots of talk about the need for new models and structures that free us from the inherent fragility, flaws and gaps of current governance and operating systems. There are also decades of work pointing compellingly to the need to reconstitute the commons into the living fabric of society.
What if there was an alternative legal governing framework that can be paired with a fluid, human operating framework — with just enough binding glue to galvanize initiatives towards regenerative mission critical direction, while allowing for enough permeability and informal, healthy ebb and flow towards emergent creativity and learning?
What if it already exists?
It does!
This new dancefloor has actually been around for a while. The FairShares Commons (FSC) is an alternative governance model, coupled with fluid organization design and adaptive development with aligning roles and relationships — a whole governance, operating model and structure for coalitions, ventures, initiatives and entities.
FSC offers a viable, legal framework that can be adapted for the coalitions, initiatives and ventures Unstitution co-catalyzes and supports. With Graham Boyd’s stewardship, when aligned and deemed timely and beneficial, we can help guide this process.
Based on the nature and purpose of the work, coalitions or entities ready to embrace an alternative form will be better equipped to establish and sustain a regenerative path, toward the development of ecosystems that serve people and planet.
Important to understand that the FairShares Commons is not a methodology. It is an adaptive overarching commons governance constitutional framework that provides enabling conditions for many aligned methodologies, processes, technologies and tools to work better in the context of uncertain environments — a non-ergodic world.
Functioning in complementary ways, FSC patterned and incorporated entities are equipped with a nested governing framework — helping various entities and initiatives become anti-fragile and more resilient. For example, place-sourced bioregional and urban community initiatives can develop stronger interdependent ecosystem-layer regenerative capacity. FSCs can work compatibly with community land trusts (CLTs,) DAOs, tokenization, alternative currencies, and blockchain technology.
Stewardship is important. All FSC incorporated companies or entities have legally drafted constitutions/articles of incorporation that must uphold a set of general principles. In the beginning phases of the entity’s life, stewards’ roles are especially vital to protect and enable these principles.
To protect:
🔮 Capacity to be a commons for its members
🔮 The interests of future generations — at least seven generations
🔮 Freedom such that it cannot be bought or sold
🔮 Against narrow interest or stakeholder groups or stakeholders gaining controlling power over the company, its IP curated as a commons, its operations, or the wealth it generated
🔮 The FairShares principles of wealth generated being shared across members and a fair share of the right to engage in governance across those affected by governance decisions
🔮 The three Adaptive Way rules: care for self, care for the other, care for the whole
To foster the:
🔮 Wise use of IP, effort, and wealth for the good of members, human society, and natural ecosystems
🔮 development and deployment of technology as an enabler — not a runaway driver
🔮 Generation of long-term sustainable wealth across multiple capitals, including financial, human and environmental, in accord with the entity’s values
🔮 Use of processes designed to surface multiple perspectives in all decisions and integrate them into a final proposal that takes into account all the perspectives from all stakeholder groups, regardless of size. For example the consent / integrative decision process of sociocracy/Holacracy
Incorporating as a FSC meets the law of the land, in a way that makes maximum use of the law to deliver regenerative outcomes, instead of today’s practice, which is to deliver maximum return to financial capital investors. To complete the legal incorporation, it is necessary to work with an open-minded corporate lawyer, accommodating the specific local/country legal requirements.
It’s also advised to get accounting/tax advice to comply with local financial authority policies and processes.
In summary
Why the FSC model is a good idea — a practical, adaptive alternative whose time has come:
🔮 Entity with clear societal driving purpose and legal personhood
🔮 Restores original [lost] wider meaning and purpose of a company
🔮 The company or entity is not an ownable good, but is legally a person with its own agency; a commons of people and capitals
🔮 Anti-fragile…robust over time and within the context of changing environments and an unknowable future
🔮 Enables good startup initiatives and ventures to become resilient
🔮 Values multicapitals or capacities
🔮 Clear rights and obligations aligned with purpose
🔮 Fairness with benefits for all stakeholders — nature and investors etc -with highest Return on Investment and Return on Impact potential in uncertain [non-ergodic] environments
🔮 Creates the conditions for essential collaboration with healthy competition
🔮 Different categories of contributions/value, voting rights and remuneration etc.
🔮 Demonstrates how adaptive [living system] practices enable human systems to function and thrive
🔮 Fosters progress toward economic circularity
What FSC accomplishes:
🔮 Provides legal governing structure, principles and practises that place value on multiple forms of capital/contribution/capacities that serve the common societal good
How it generally enables and protects:
🔮 Clear minimum critical provisions and safeguards, baked into the Articles of Incorporation, mitigate against risk/bad actors
🔮 Delineates clear transparent decision rights and obligations
🔮 Facilitates decisions aligned with the commons ecosystem and driving purpose for existence
🔮 The flexibility to shape or tailor the legal FSC according to special nature, properties or requirements of the particular entity — not a cookie cutter
🔮 Engenders the high level of systemic trust and justice required
🔮 Meets current needs and adapts to changing requirements and circumstances
🔮 Preserves core principles and elements
🔮 Provides a crucial missing link, tangibly navigating the shift from conventional Horizon 1/2↗ regenerative Horizon 3
Coalition and ecosystem building work can be more joyful. We can benefit from the diversity and flexibility of networks while working within a legal or patterned FSC framework that values its members for the work we love and are able to do, while collectively learning, contributing and adding value, and living into a regenerative future.
In this video presented at the 2024 Ergodicity Economics Conference, Graham Boyd articulates the potential of FairShares Commons companies/entities. He points the way towards integrative regenerative ecosystem building, elaborating on the structural integrity, systemic trust and resilience of FSC, undergirded by governed cooperative profit pooling among ecosystem stakeholders. There’s a treasure trove packed into that 10 minute clip.
There are missing links…functional catalytic HOWs that can get us off the pervasive degenerative monocapital system toward a Horizon 3 life-affirming paradigm. It needs many of us on board building and contributing to regenerative ecosystems, to:
🔮 Shift the trajectory and yield the mutual social, environmental and economic benefits
🔮 Leverage and step up needed shifts that are not dependent on global scale economic change happening first
🔮 Understand the principles of ergodicity — the realities of living and working in an uncertain non-ergodic world
🔮 Unlock and allocate the funding flows required to support and gain resilient life-affirming regenerative progress at the interdependent ecosystem layers
Going a bit deeper…important to note that FairShares Commons incorporation isn’t limited to new startups — beginning fresh and from scratch.
Ventures/entities that already operate with pre-existing legal status as incorporated businesses can transition. FairShares Commons has some flexible provisions for reincorporation that deal with pre-FSC company incorporation.
For example, pre-existing share distribution can be accommodated whereby the new team/members/stakeholders have all the appropriate governance power even if some of the financial value of the (original) founder’s shares remains with the founder. A fixed or revenue dependent schedule can be established for founder share purchase. Alternately the founder can treat their shares as qualifying for royalties (% of profits / revenue.)
Good to know that FSC reincorporation is an option, enabling transition from conventionally incorporated and governed monocapital entities toward healthy adaptive multicapital regenerative ecosystem-layer governance and operations.
Phew…Congratulations for hanging in. We know this stuff cannot be absorbed with a cursory skim read. That’s why we’re so pleased to be working closely with Graham and colleagues to ease the way for others — as part of an ongoing emergent and strategic learning journey designed to make real progress that widens access for all.
We now know with confidence how a FairShares Commons governance framework can truly change the game in ways that align with the life-affirming operating principles that so many of us hold in our heads, hearts and hands. That’s what we mean by:
Wisdom with teeth
When we figured that out, we broke into a big happy dance! Come dance with us.
This article was updated again April 2024, reflecting additional information, perspectives and ongoing action research, as we continue to observe, listen, assimilate, curate and adapt — a learning journey for us all.
Unstitution was birthed as a collective creative commons and nested ecosystem. We (co-)catalyze and support collaborative communities, initiatives and coalitions where people from across sectors, disciplines, cultures, generations and walks-of-life work together on mission critical issues. From readiness through to regenerative progress — moving beyond polarization — is how we roll. The links embedded throughout this article are a warm invitation to go a bit deeper, at any time. For more insights reflecting our ongoing journey, our suite of Unstitution articles are published on Medium. They portray a small sample of the ways we are adapting and contributing among ever-expanding commons-based communities and initiatives inspired and fuelled by citizens — perhaps better described as denizens — anywhere in the world — living into the principles and spirit that govern our collaborative work.
You can follow Unstitution and engage with us on LinkedIn. Many of our posts and perspectives also pop up under hashtags #messyhumanness and #wisdomwithteeth.
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