 | 6.9. Sociocracy, ownership and control | |
|---|---|---|
| ↢ | Chapter 6. Implementing Sociocracy | ↣ |
Owners of for-profit organizations usually have control of their organizations by direct ownership or by majority vote of the shareholders and/or their Boards of Directors. Nonprofit organizations and volunteer associations are usually controlled by majority vote of their Board of Directors. Sociocratic organizations are not owned and controlled by anyone because of decision making by consent and the double-linking circular organizational structure. The sociocratic organization owns itself. Without the fear of power-over control, investors can be welcomed because they bring needed funds to the organization. Hostile takeovers or unwelcome moves of operations overseas are no longer possible. In nonprofit contexts where funders replace investors, funders are welcome as partners rather than dominant or absent outsiders, and the measure of effectiveness includes both the well-being of workers and the degree of positive impact on society. A sociocratic organization needs to have sociocratic principles and practices stated in the organization’s articles of incorporation, partnership agreements, by-laws and/or any other documents that define the legal entity. A sample set of bylaws for your purpose may be found online. However legal advice is beyond the scope of this book.
Here are three aspects to keep in mind:
Transparency: financial information including salaries and profit distribution is open to all members of the organization. They do not have to be open to the public (although they could be).
We can put any policy around remuneration in place, we just have to do it by consent. If we want to decide by consent that only the webmaster is paid, we can do that. If we decide by consent that your operational leader earns twenty times as much as everyone else, that is your choice. The tendency, however, is that organizations with transparent pay will not have as big of a pay gap as intransparent organizations that keep pay opaque, and we hope that every sociocratic organization will strive for more equality in pay as well.
In a sociocratic organization adopting the model of shared ownership, investors get a fixed rate of return, as with a loan, and they get a share of short and long-term profits. The workers get a fixed rate of return for their labor (their salaries or wages) and also get a share of the short and long-term profits. Therefore all share an interest in the well-being of the organization and all its members.
Consideration of formulas for the division of profits among investors and workers is beyond the scope of this book. For a more extensive discussion on those topics see ‘‘We the People,’’ ‘’‘BossaNova’’ and the writings of Gerard Endenburg (for references see section Section A.3.1, “Literature” in the appendix).