Governance Equation

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Kurt Laitner (Sensorica):

"The governance equation is a mechanism to establish heterogeneous fluid governance of a Nondominium. Governance is fluid in that behaviors and contributions determine decision making authority in real time. Governance is heterogeneous in that different methods for determining authority can exist for each decision type identified for the Nondominium. While there will be standardized decision types available for use, a specific Nondominium may establish their own. The only required decision type is to establish the authority to define decision types.

The governance equation is a standardized, extensible set of measurable dimensions of governance. These dimensions will have considerable if not complete overlap with those of the Value Equation. A particular Nondominium agreement may use some or all of those dimensions, and may assign weights to them to incent the emergence of their desired organizational form. A governance equation apportions decision making rights (authority) to individuals based on their accrued holdings of the dimensions that make up the governance equation and the weights assigned to those dimensions in proportion to other members. An example of democratic decision making could be based solely on membership. An example that used the value equation to determine voting rights would be a meritocracy.

Governance is implemented through the identification of decision types, and the association of a governance equation to each decision type. The primary governance equation for a decision type determines who has decision making authority. There may be subordinate governance equations that determine who should be consulted prior to a decision (must reply), informed of a proposed decision (may reply), or merely informed of the actual outcome of the decision. Decision types also specify the decision scope, decision mechanism, decision process, required inputs, voting rules, minimum open time, available outcomes, monitoring and compliance mechanisms and appropriate sanctions for non-compliance." ([1])