Governance
Corporate Governance vs DAO Governance
In the corporate world, the key decision-makers of the organization are usually the board of directors headed by the Chairman, followed by the executive team headed by the CEO and/or the President.
The responsibility of running a tight ship falls on these roles. The direction of the company is dependent on the stakeholders, which own a share, and voting rights on whom to elect to lead the company.
DAOs as compared to companies are more transparent and publish every documentation in the public domain.
Here’s a handy comparison of what constitutes a corporation and a DAO.
| Description | Corporation | DAO |
|---|---|---|
| Decision Makers | Board of Directors and Executive Team | Voted upon by the DAO |
| Stakeholders | Shareholders/Stockholders | Token holders and the community |
| Democratic Process | Stockholder Voting | Voting |
| Hierarchy | Bottom-up | Top-down |
| Meetings | Annual Shareholder Meetings | Community Calls, Townhalls, AMA, Forum |
| Policies | Executive decisions | Improvement Proposals |
| Workers | Full Time Employees | Contributors |
| Compensation | Hourly-based | Merit-based |
| Working hours | Full-time of 8 hours. | Asynchronous |
| Job Policy | Limited to one job | Simultaneously join different DAOs |
Organizational Structure
As discussed, the organizational structure of DAOs is usually flat in the hierarchy, having a group of core team members that has initiated the DAO, and a group of contributors that are driving the activity of the organization.
Within the DAO, the core team is usually composed of developers and a maintainer who oversees the changes in code.
Outside of the core team are called contributors which are freelancers by nature. They are usually self-organized with different departments, having their own department leads.
Departments in a DAO may include:
- Policy Team
- Engineering Team
- Operations Team
- Creative Team
- Marketing Team
- Community Team
- Partnerships
Coordination
Coordination in DAOs usually starts with the community itself.
It starts with the process of community calls and forums usually held on platforms like Discord, Telegram, and Twitter.
For enacting policy updates or upgrades in the code, Improvement Proposals are put forth in forums for everyone to scrutinize.
Afterward, a process of voting takes place that votes either for, against, or abstains from changes in the protocol.
This process requires a holder of governance tokens that are tied to the protocol itself, and each token may have a percentage of voting rights.
Just like in corporations, when a vote for a resolution exceeds the majority of the token holders, the proposal will be passed.
In effectively coordinating tasks, a board with available tasks is made available to the contributors to implement. Contributors can lead projects based on proposals from threads on the forum.
A Contributor Server is managed asynchronously by the DAO for core members and contributors to collaborate and coordinate the tasks effectively. Since DAOs are a worldwide organization, expect a lot of members from different time zones and different cultures.