Shaping the Corporate Landscape University of Bristol Law School 14 th -15 th June 2016 The internationalisation of the FairShares Model: navigating company law in the UK and US Dr Rory Ridley-Duff, Reader in Co-operative and Social Enterprise Sheffield Business School, Sheffield Hallam University Contact: Rory Ridley-Duff, 2016

Outline of Presentation FairShares: brief introduction to the theoretical foundations / assumptions of the FairShares Model Internationalisation: brief introduction to the theoretical perspective adopted to study internationalisation. Methodology: naturalistic inquiry (case studies) of UK and US companies incorporating using FairShares IP. Findings: seven factors affecting their internationalisation of FairShares Model Implications: hidden stories of bottom-up social enterprise and localisation (entrepreneurial agency v legislative change v globalisation).

Rory Ridley-Duff, 2016 Theoretical foundations of the FairShares Model Ridley-Duff, R. J. (2015) The Case for FairShares: a new model for social enterprise development and the strengthening of the social solidarity economy, Charleston: CreateSpace

Rory Ridley-Duff, 2016 Theoretical foundations of the FairShares Model Ridley-Duff, R. J. and Bull, M. (2016) “Solidarity co-operatives: the (hidden) origins of communitarian pluralism in the UK social enterprise movement”, pending submission to OS.

Rory Ridley-Duff, 2016 Recognition of four investment types: by founders, labourers, users and financiers. Each investment type entitles the contributor to membership and a return on investment (for human, intellectual, social and financial capital contributions). Adopting a FairShares lens Source: McCulloch, M. and Ridley-Duff, R. J. (2016) “Beyond Accounting for Capitals: FairShares – a model for recompensing capital contributions”’, in Rethinking Capitals, London, ICAEW (in press)

Rory Ridley-Duff, 2016 Theoretical perspective for studying internationalisation Giddens (1984) – a duality between structure and agency (‘structuration theory’) –Structures are co-produced by the actions of agents who reproduce them through their social interactions and habits of mind. –Agents can change structures, but only slowly, because institutional logics inhibit rapid change (Powell and DiMaggio, 1987; Burns and Scapens, 2000) Based on Giddens (1990) – entrepreneurial agency involves disembedding and reembedding norms (Jack and Anderson (2002). –FairShares is positioned as part of the solidarity economy (Scholz and Schneider, 2016; Ridley-Duff and Bull, 2016) that contributes to ‘new co- operativism’ and ‘platform co-ops’ ( Vieta, 2010; Conaty and Bollier, 2015). –Studying social entrepreneurs engaged in the internationalisation of FairShares provides an opportunity to study how dis-embedding and re- embedding occurs within the solidarity / cooperative economy.

Rory Ridley-Duff, 2016 Methodology for studying the internationalisation of FairShares Naturalistic inquiry into the disembedding and reembedding of FairShares in the UK and US by social entrepreneurs at Dojo4Life Ltd (UK) and AnyShare Society (US). 1.Systematic comparison of FairShares Model rules sent and the final Articles of Association registered. Create a list of all clauses that were changed (done) 2.Code every rule change (using Nvivo) to develop an initial conceptualisation of the rationales for rule changes (done) 3.Interview the founders of the two case companies to develop a mutual understanding of why the changes occurred (done) 4.Triangulate with correspondence / company documentation on incorporation and re-code the data based on new understandings (pending). 5.Develop a theory of the influences that will affect the internationalisation of the FairShares Model (a work in progress). Social constructionist epistemology / realist ontology.

Rory Ridley-Duff, 2016 Introducing the Cases 1.Graham Boyd registered Dojo4Life Ltd as a UK Company on 13 th December 2015.Dojo4Life Ltd 2.Rob Jameson (below) and Eric Doriean registered AnyShare Society as a US (Delaware C) Corporation on 13 th January 2016.AnyShare Society

Rory Ridley-Duff, 2016 Dojo4Life Ltd (Clause 5) – Company Objects “to advance the widespread practical adoption of the evidence-based neuroscience and developmental psychology research; and of organisational designs and practices; which improve systemically the capacity of organisations to create environmental, human, social and financial capital...” (Triple-bottom line outlook) AnyShare Society (Clause 5) – Company Objects “to develop technologies that eliminate scarcity by unlocking the hidden abundance of resources available amongst our members through systems for buying, selling, trading, gifting, renting, borrowing and collaborating with their friends, community and fellow members.” (Sharing economy outlook) Introducing the Cases

Rory Ridley-Duff, 2016 What did they change (highlights)? Dojo4Life LtdAnyShare Society Membership, Capital and FairShares Branding Support for listing unquoted shares on a crowd investing platform. Entrenched clause for share types / characteristics / issues Separation of voting and dividend rights (to access tax reliefs for founders) Support for the use of crowd funding / investing platforms. From ‘fixed assets’ to ‘assets’ in company valuation clause to accommodate norms for technology companies. Governance Inclusion of founders in weighted voting. Entrenched clause committing to Holacracy / Requisite Organisation Design + qualifying criteria for Directors based on Dialectic Fluidity. Inclusion of founders in weighted voting. Requirement that 10% of a member class supports a resolution before advancing to a General Meeting. Expenses, Benefit and Pay 15:1 ratio between highest and lowest paid. Dividend payments for founders. Separate Founder and Labour approval for changes to the maximum pay ratio. Change dividend allocations: Founders (1%), Labour (40%), User (24%) and Investor (35%). 10:1 ratio between highest and lowest paid. Dividend payments for founders. Changed dividend allocations: Founders (10%), Labour (25%), Users (25%) and Investors (40%).

Rory Ridley-Duff, 2016 Why did they change? CategoryDescriptionSample Data Theme DescriptionEvidence Legal Changes are made to conform to the legal requirements of the law of incorporation in the jurisdiction AnyShare Society (Clause 52) Dojo4Life (Clause 19d) Cultural Changes are made to align with a national, regional or industry norm not required by the law of incorporation. AnyShare Society (Clause 10e) Dojo4Life (Clause 11) Entrepreneurial Changes are made on the basis of the entrepreneur's personal values and/or knowledge as a social entrepreneur, not for cultural or legal reasons. AnyShare Society (Clause 5g) Dojo4Life (Clause 5c) Professional Changes are made in response to advice given by a professional adviser. AnyShare Society (Clause 21) Dojo4Life (Clause 49d) Historical A change is made because there is a pre-existing condition or sequence of events that requires the change. AnyShare Society (Clause 13c) Dojo4Life (Clause 31f) Practical adequacy The change was made because the existing clause was considered to be impractical. AnyShare Society (Clauses 29 – 31, Clause 47). TranslationThe change was made as a result of translating a term from one language to another. Experience of presenting this paper in Japan !

Rory Ridley-Duff, 2016 Implications Radical change can occur within existing legal frameworks (does not require new laws, just new habits and social practices triggered by entrepreneurial agency). –Over half the changes noted (so far) are products of entrepreneurial agency –Fewer than half the changes are for legal, cultural, professional compliance. Entrepreneurial agency can propagate changes to legal norms and forms (both Dojo4Life Ltd and AnyShare Society have the inclination and means – via platform coop technology - to propagate FairShares principles amongst their users). Internationalisation will not produce a standardised FairShares Model. It is more likely to trigger processes of interpretation that produce local / sector implementations of the FairShares Model.

Rory Ridley-Duff, 2016 FairShares Resources FairShares Website: FairShares Community: Technical Support: FairShares Novel: The Dragons’ ApprenticeThe Dragons’ Apprentice FairShares Book: The Case for FairSharesThe Case for FairShares Academic Conference Paper Academic Journal Article Learning and Teaching Materials