TSYSGovernance/pages/153.OperatingAgreements.TurnkeyNetworkSystemsLLC.TurnkeyNetworkSystemsLLC-CompanyOperatingAgreement.article-12/default.md

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ARTICLE XII - SOCIOCRACY PRINCIPLES	ARTICLE XII - SOCIOCRACY PRINCIPLES

ARTICLE XII - SOCIOCRACY PRINCIPLES

12.1 Sociocracy Framework

The Company and each Series shall implement governance structures and processes based on sociocracy principles. Sociocracy provides a framework for effective governance, transparent decision-making, and equitable participation by all stakeholders.

12.2 Core Principles

12.2.1 Consent Decision-Making

The Company and each Series shall use consent decision-making rather than majority voting for policy decisions. Consent means that a decision can be made when none of the participants has a reasoned and paramount objection to a proposed decision.

Key aspects of consent decision-making include:

• A proposal is presented clearly with adequate background information

• Clarifying questions are asked and answered

• Reactions to the proposal are shared

• The proposal may be amended based on feedback

• Objections are raised, discussed, and resolved

• Consent is achieved when no objections remain

12.2.2 Circular Organization

The Company and each Series shall organize governance into interconnected circles, where:

• Each circle has a defined aim and domain of authority

• Circles are connected through double-linking (two people connecting adjacent circles)

• Higher-level circles determine the aims and domains of lower-level circles

• Lower-level circles determine how to implement their aims within their domains

12.2.3 Double-Linking

Communication and alignment between circles shall be maintained through double-linking, where:

• An operational leader from a lower circle is a full member of the next higher circle

• A representative elected by the lower circle is a full member of the next higher circle

• Both links participate fully in the decision-making of both circles

12.2.4 Elections by Consent

Leaders, representatives, and people filling functional roles shall be elected by consent after open discussion, rather than by competitive voting or appointment.

12.3 Circle Structure

12.3.1 Board Circle

The Board shall function as the top circle in the Company's governance structure, with responsibilities as defined in Article IV.

12.3.2 Series Governance Circles

Each Series shall establish appropriate governance circles as determined by the Series Manager(s), which may include:

• Strategic Circle - focusing on long-term direction and major decisions

• Operational Circle - focusing on day-to-day operations and implementation

• Specific Domain Circles - focusing on particular functions or aspects of the Series business

12.3.3 Circle Autonomy

Each circle shall have autonomy within its defined domain, subject to the constraints established by higher circles and this Agreement.

12.4 Decision-Making Process

12.4.1 Proposal Formation

Proposals may be generated by any member of a circle and should be:

• Clearly stated in writing

• Supported by relevant background information

• Connected to the circle's aim and domain

• Presented with adequate time for consideration

12.4.2 Consent Process

The standard consent process shall include:

• Presentation of the proposal

• Clarifying questions round

• Quick reactions round

• Amendments to the proposal if needed

• Consent round (asking for objections)

• Integration of objections

• Final consent round

12.4.3 Operational Decisions

Day-to-day operational decisions may be made by the appropriate role-holders without going through the full consent process, provided that:

• The decisions fall within the role-holder's domain

• The decisions do not conflict with existing policy

• The role-holder is willing to reconsider the decision if concerns are raised

12.5 Roles and Responsibilities

12.5.1 Required Circle Roles

Each governance circle shall at minimum have the following roles:

• Circle Leader - accountable for the circle achieving its aim, allocating resources, and assigning operational roles

• Facilitator - leads the circle meetings and decision-making processes

• Secretary - schedules meetings, maintains records, and ensures transparency

• Representative - represents the circle's interests in the next higher circle

12.5.2 Role Selection

All roles shall be filled through election by consent within the circle, with the exception of the Circle Leader, who may be appointed by the next higher circle.

12.5.3 Role Reviews

Performance in roles shall be regularly reviewed by the circle to ensure effectiveness and provide feedback for improvement.

12.6 Meetings

12.6.1 Regular Circle Meetings

Each governance circle shall meet regularly (at least quarterly) to:

• Review progress toward objectives

• Make policy decisions

• Address tensions or issues

• Conduct elections as needed

• Allocate resources

12.6.2 Meeting Formats

Circle meetings shall follow a structured format that typically includes:

• Opening round - personal check-in and meeting readiness

• Administrative matters - consent to agenda and previous minutes

• Content items - addressing tensions, making decisions

• Closing round - meeting evaluation and personal reflection

12.6.3 Facilitation

All governance meetings shall be facilitated to ensure:

• Equality of voice

• Focus on the circle's aim

• Efficient use of time

• Adherence to the consent process

• Documentation of decisions

12.7 Continuous Improvement

12.7.1 Circle Self-Evaluation

Each circle shall periodically evaluate its own effectiveness and make improvements to its structure and processes.

12.7.2 Policy Review

All policies shall be reviewed on a scheduled basis to ensure they remain relevant and effective.

12.7.3 Governance Audits

The Company shall conduct periodic governance audits to ensure that sociocracy principles are being properly implemented throughout the organization.

12.8 Integration with FairShares Model

The sociocratic governance structure shall be integrated with the FairShares membership model described in Article VIII to ensure that:

• All membership classes have appropriate representation in the governance structure

• The interests of different stakeholder groups are balanced

• Decision-making authority is distributed based on both stake and competence