Autonomous Councils for Rapid Innovation at the Business and Legal Layers

May 7, 2013

ID Commons, a user-centered identity non-profit umbrella group (best know for the Internet Identity [Un]Workshop), is also notable for advancing an innovative corporate entity form called "Autonomous Councils".   

Autonomous Councils provide less expensive, more flexible ways for teams to self-organize around building out ideas for new product, services and or creative initiatives.  ID Commons is organized as a 501(c)(6) tax-exempt organization, of the same type as business leagues, chambers of commerce, boards of trade and other business consortia or technology standards oriented groups.  This innovation was adopted through an amendment to the bylaws of ID Commons.  The concept was initially suggested and developed by Dazza Greenwood, a member of the ID Commons Stewards Council (on behalf of the Legal Forum), in response to the request by the council to have a way for working groups to have a more formal structure but not need to incorporate a stand alone organization.  This model borrows, very generally, from an approach used by NACHA emancipated council model.  

The following provision represents a potentially powerful and simple method for creating organizations quickly and lightly while preserving a clear ramp up to launch a new corporation as needed.  The final language, as formally adopted, also benefited by contributions from Mary Ruddy. Chair of ID Commons, and Dan Perry, then counsel for ID Commons.  The new amended bylaw of ID Commons charter reads as follows: 

  • 6.1.1.  Autonomous Councils.
  • An Autonomous Council is a type of Working Group that is organized structurally like a stand-alone legal entity.  A working group that operates as an Autonomous Council adheres to the following governance rules:  The Autonomous Council, in addition to it's charter, promulgates a set of bylaws, defining, at minimum, it's governance structure, decision making including voting procedures and it's internal operations.  An Autonomous Council may set up an IC authorized bank account and may enter into contracts and authorize the disbursement of monies from it’s IC authorized bank account, provided such accounts and contracts are in all respects consistent with the purposes and policies of the IC and in accordance with the governance, accounting and management rules of that Council.  An Autonomous Council may create lesser included organizational groups, such as working groups, task forces, advisory groups, user groups, or other groups, and may allocate funding to any or all such groups from it’s IC authorized bank account, provided each such group is consistent with the purposes and policies of the IC and in accordance with the governance, accounting and management rules of that Council.  An Autonomous Council may choose to terminate it’s existence, reverting it’s unexpended funds to the general fund of the IC, or to graduate by spinning itself off as a new separate legal entity or by merging itself into a pre-existing separate legal entity and transferring it’s assets accordingly.  Such graduation and asset transfer must be consistent with the purposes and policies of the IC and in accordance with the governance, accounting and management rules of that Council and IC Steward Council.  A precondition of IC Steward Council approval for graduation of an Autonomous Council is that all tax, contractual and other obligations owed by or arising out of the Autonomous Council have been discharged or have otherwise been addressed such as by assignment to the satisfaction of and approval by the IC Steward Council.  Any approvals that are required of the IC Steward Council under this section shall not be unreasonably withheld."

One significant innovation featured by this bylaw is the explicit agreement for spin offs or other voluntary departure by the subgroup,   It is noteworthy that ID Commons has, over the years, spun off several successful community initiatives that formed their own non-profit corporations and in some cases ID Commons has allowed external community groups to merge their group into ID Commons and still keep some of their identity, have a mail list, hold meetings, etc.