Browsing by Author "Alston, Eric"

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Entangling Organizational Success and Survival in Complex Polycentric Systems
(2024) Alston, Eric
The broadest way to characterize organizational resilience verges on the tautological: an organization is resilient if it survives. Survival means existing resources are sufficient for the organization to continue to exist. But as formally constituted fonts of collective action, organizations exist to realize shared human intent within an uncertain world. This makes an organization’s purpose inextricable from resilience in practice, because purpose greatly defines an organization’s size, internal processes, and the extent of competition it faces for members and consumers. Within the complex polycentric adaptive systems that are human societies, an organization’s resilience is entangled with its success in achieving its purpose, for sufficient failure to realize a purpose, or abandonment of purpose altogether will lead to an organization losing the people and resources that are integral to its survival. This analysis explores common definitions of organizational resilience and success and interrogates these definitions as a function of purpose, shedding new light on what it means to survive collectively in an uncertain competitive landscape.
Litigating the Ledger: Civil Liability for DAO Controllers
(2024) Alston, Eric
Organizations coordinating using blockchain tools nonetheless have a variety of fiduciary duties to their members. Thus, DAO controllers probably have a set of relationships that are not well clarified in practice when it comes to what is the nature of the duty owed token holders by those who exercise. When certain members of DAOs make decisions that materially affect the interests of wider range of DAO members (as evinced by token holdings), these members are exercising the equivalent of managerial control. Whether or not that control is managerial is part of the deep questions that are the subject of ongoing consideration by regulatory authorities around the world. The fiduciary duty of care requires that controllers make decisions that pursue the corporation's interest with reasonable diligence and prudence. A duty of loyalty is where decision makers within the company should act in the interest of the company, and not in their own interest. These, though, are significantly cabined by the business judgment rule, which courts are loath after the fact to disturb every business judgment made precisely because businesses operate in a risky environment. However, there are well-understood exceptions to the business judgment rule involving self-dealing, excessive compensation, inactivity with invested capital, and investments made outside the ordinary course of business. Given the uncertainty surrounding the organizational status of DAOs in many jurisdictions, though, it is likely that civil plaintiffs attorneys are deterred from filing otherwise viable cases. Thus, if the organizational status of DAOs is clarified, it is likely that cases will be brought under the areas of liability I discuss herein.
Path Dependence: An Uncomfortable Institutional Design Axiom
(2024) Alston, Eric; Case, Amber; Zargham, Michael
In governance systems, path dependence means the trajectory to an ideal configuration defines the attainability of that ideal. For example, while decentralization is a common ideal, most real-world systems must start from a centralized point and decentralize progressively. Yet path dependence means there is not a clear path to every idealized institutional choice set. Thus, while idealists focus on describing perfect futures, builders must pragmatically chart trajectories given initial conditions. Path dependency forces us to acknowledge the necessity for pragmatic concessions in order to deliver outcomes. Our design and chartering of an innovative data trust, Superset, has brought this uncomfortable axiom into stark relief. Currently governed by a board of Trustees, Superset coordinates data governance spanning digital, legal and financial contexts. Yet this same centralized trustee authority creates more representative data governance relative to the status quo. This highlights how path dependence’s inescapability in complex polycentric systems means institutional design in practice must be Ostromian: tailored to its specific context including the constraints inherent thereto. This paper explores Superset's initial path of bootstrapping a new data governance model towards a more equitable and representative future from a starting point anchored in the possible given current legal, technical, and financial constraints.