"Everyone working in HolacracyOne gets a K-1 tax statement rather than a W-2, just as a partner in a law firm does; they have a legal voice in the governance of the organization through its Holacracy practice; and they legally become members of the partnership and hold a membership interest in a share of the organization’s profits. We use multiple classes of membership interest to grant both fixed and variable compensation, without necessarily giving what’s typically thought of as an 'equity stake' (although that’s possible as well).
"Another interesting shift specified in our Operating Agreement is HolacracyOne’s board-level power and control. Rather than a company driven by shareholder representatives alone, our Operating Agreement defines a multi-stakeholder board – investor representation is only part of the equation. Other board seats represent other major stakeholder contexts of the company, and the board members in those seats do not have the typical fiduciary duties to the shareholders."
"Yet even with our multi-stakeholder board, the board members are still not allowed to control the company as if it were property – even collective property. We wouldn’t do that with our children, and HolacracyOne’s Operating Agreement gives our company the same protection. What drives the company instead is its purpose.
"The Operating Agreement – along with the Holacracy Constitution – creates a legal framework and a governance process which allows and enforces a purpose-driven organization, free of 'ownership.' Investors are possible and embraced, but they do not own and control the company any more than our mortgage company owns and controls us. At the same time, board members can define key constraints to ensure no harm is done in the organization’s broader contexts."