Stakeholder Control: Sociocracy Is Not Democratic Enough

In the decades before the blockchain movement’s advocacy for Decentralized Autonomous Organization (DAOs), the most prominent idea for democratizing societal governance was sociocracy. This article will demonstrate why traditional sociocracy governance rules are not much more democratic than traditional business or non-profit governance in the United States. Future articles will delve into DAO governance.

The Three Main Ideas of Sociocracy:

(1) An organization is governed by a hierarchy of committees called “circles”. Each circle has a domain of responsibility: The highest circle committee for the entire organization, and subordinate circle committees for more specific tasks.

(2) As in traditional hierarchies, in sociocracy higher levels appoint leaders for lower levels. In addition, sociocracy offers a truly innovative step towards greater democracy: in the opposite direction upward, each lower circle elects someone to serve in the circle committees above it in the hierarchy, and that representative has full voting rights in that higher circle committee.

(3) Within each circle committee, a Facilitator acts as the Chairman. The Facilitator has a duty and responsibility to guide the committee through a process by which everyone in the committee receives chances to voice their views on decisions. The agreement process relies on all members understanding that the goal is not a majority vote or 100% consensus which would require 100% full…