Episode 11 14 June 2021
Intrepid creator of new corporate structures
Lawyer and facilitator
Founder, Barefoot Lawyer
Patrick Andrews is a lawyer and facilitator with over 30 years’ experience in corporate structures and governance. He goes by the description Barefoot Lawyer. A barefoot lawyer he says is someone who makes law accessible, who meets people where they are and who is connected to the earth.
An intensely curious soul and a deep thinker, he has garnered a reputation for designing innovative, human-centred and earth-friendly corporate structures. In this episode, we talk about his journey to the outer reaches of corporate law and governance, and the treasures he brings back on his intellectual travels.
Patrick Andrews is a lawyer and facilitator. He is the founder of Barefoot Lawyer. A barefoot lawyer, says Patrick, is someone who makes law accessible, who meets people where they are and who is connected to the earth. All of these are important in his practice.
He is also co-founder of Human Organising Co ,a collaborative venture of five individuals, following a path to find more meaning and life in work. Coming from diverse backgrounds - law, healthcare, theatre, inter-cultural collaboration - they are committed to helping others uncover the deeper humanity that often lies dormant in an organisation.
[1:39] Patrick shares his story of his first trip to China, where he realised his job as a corporate lawyer had wider repercussions on society and the planet, that weren't necessarily for the better.
[8:49] Patrick discusses his years of 'wandering', looking for root causes of why so many good people in the capitalist, corporate world make decisions that perpetuate harm and inequity.
[9:18] Patrick says he began to see it was a systemic issue and sought to apply his innate curiosity to solving it.
[11:50] Patrick forayed into the not-for-profit world and found an equally toxic environment there.
[12:51] Patrick explained that he finally determined that our existing corporate legal structures are not equipped to underpin the type of corporation the world needs and he set about building it.
[17:43] Patrick began to see his role as a bridge-builder, working with entrepreneurs who were visionary and brave enough to work with him to create new structures.
[19:47] We talk about the B Corporation model, which Patrick sees as a positive but still interim model to more radical change.
[22:16] Patrick explains his ideas of moving beyond the concept of ownership of a company and ownership of employees, which harks back to serfdom and slavery.
[25:07] I ask Patrick his views on The British Academy's Future of the Corporation and Principles of Purposeful Business, which is brilliant in its conceptualisation of the different parts that need to be innovated.
[26:27] Moving away from a top-down, growth-oriented model to something more fluid and accepting of human complexity aligns with quantum theory and nature. In this vein, Patrick is exploring multiple-board models.
[31:33] Patrick shares the four elements of change he is working on, starting with embedding purpose in by-laws, in common with B Corporations. The second element is implementing a mission lock to protect the purpose through a golden-share mechanism.
[33:36] In discussing the third element of removing a rigid, controlling, hierarchical management structure, Patrick brings up the seminal book Reinventing Organisations by Frederic Laloux,
[36:30] Patrick's fourth element is the decentralisation of power towards polycentric governance, reminiscent of Indigenous ways of organising their tribal structures including Aboriginal Australian and Native American.
Patrick's website: barefoot lawyer.uk
Margaret Wheatley: author, teacher, speaker and management consultant.
B Corporations: businesses that meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose.
Future of the Corporation, a British Academy program examining the purpose of business and its role in society,
Principles of Purposeful Business: the British Academy's eight principles of purposeful business for business leaders and policymakers.
Colin Mayer, CBE, Professor of Management Studies at Said Business School.
Purpose Economy: a group of non-profit and for-purpose organisations developing an ecosystem of knowledge, resources, support, and capital necessary to make transitioning to steward-ownership and raising capital on aligned terms easier for businesses.
An article on mission lock.
Reinventing Organizations: A Guide to Creating Organizations Inspired by the Next Stage of Human Consciousness, by Frederic Laloux.
Bill Neidjie, author of Australia's Kakadu Man: Bill Neidjie, philosopher, Gagudju elder and storyteller, the last speaker of Gagudju.
Hello everyone, and welcome to the New Earth lawyer podcast, where we feature conversations with lawyers who are changing the practice of law to change the world. My name is Geraldine Johns-Putra and I'm a lawyer based in Melbourne, Australia. Today I have with me Patrick Andrews, who's a lawyer and a facilitator, with over 30 years experience in corporate structures and governments. He goes by the description the Barefoot Lawyer. And Patrick says, a barefoot lawyer is someone who makes law accessible, who meets people where they are, and who is connected to the Éarth. Patrick and I have a bit in common. In the 1990s, Patrick was a corporate transaction lawyer and I have been a corporate transaction lawyer, he worked with large law firms, I worked with large law firms. He had a moment much earlier than I did when he realised that what he was doing, possibly wasn't for the greatest good. And then life began to unfold in interesting ways, I gather, Patrick. But anyway, welcome, and I'll let you continue with the rest of the story. It's great to have you.
Thanks, Geraldine. So yeah, so I'll share the story, if you like, the moment.
Yeah, please do.
So I'm sitting in a taxi in Shanghai. And it's late 1999. And I was working for one of the world's largest home improvement retailers called Kingfisher who own B&Q in the UK, and they own chains around the world. And so late 1999, China was just starting to boom, a lot of the world's cranes were in Shanghai, it was huge expansion and the laws were changing to permit retailing, foreign retailing, so I'd flown in to have a meeting with a local law firm to see how do we set up retailers in Shanghai. So Im in this taxi coming out, never been to China before, and looking at this, just gawping if you like, out the taxi window on the drive in from the airport. And we go past this line of what we call mom-and-pop shops. So just family-owned businesses selling cement and wallpaper and tiles and it's colourful and diverse and lively, and I'm drinking it all in.
And my colleague, a good guy sitting in the taxi, who's been coming out there for a while says, these are the sort of people we're going to put out of business. And I thought, oh, and my mind went back 10 years before when I backpacked around Southeast Asia, and loved all the markets and the just the colour and life of the retail experience, we'd call it in the trade. And I thought, I couldn't have imagined that 10 years on, I'd become this corporate person who was serving distant masters coming to put these people out of business.
And I suppose I was open to the idea that replacing these, you know, slightly messy and uncoordinated and perhaps a bit inefficient family owned businesses with big square boxes could be a good thing. But I realised that there was no place in my organisation to ask the question of why are we doing this? Is it a good thing? Are we happy with the compromises, the trade-offs between losing these livelihoods and replacing them with efficiency?
And there was something about and I think I'd realised, too, that I've been working for many years as a corporate lawyer in-house and I've never really allowed myself to ask that question of, what's the purpose of my work and why am I doing it? And what is this growth thing anyway? And I grew up in a Catholic, was brought up in the Catholic Church and I knew what a heresy was. A heresy was something that's unspeakable. And in a big corporation, I realised it was unspeakable to ask, why are we pursuing growth? And what was really, for me very, very personal about that was that I love trees. And I've lived for years with a botanist, and I'd been to rainforests in Queensland, and in New Zealand, the Kauri forests, and in Thailand, and all over the world. And I was now working for the biggest importer of timber in the UK.
And I knew from the inside, that the main driving impetus behind that organisation was to grow and that they would do anything to grow, you know, borderline within the law, sometimes not always within the law to push the boundaries of how do we get more growth. And it was mindless. And I use that word mindless deliberately, because it wasn't like there was some body or some group of people there saying, we're going to chop all these trees down, we're going to strip the Amazon in order to sell stuff, more stuff than people actually need. Nobody was actually having that thought they were just pursuing something without starting to think, is this a good idea? So once I'd seen that, sort of, my days were numbered in the organisation, I guess.
Now that's ... so 1999, I had this moment of understanding that growth itself wasn't necessarily a good thing. I did an economics degree in addition to a law degree. And I was taught about gross domestic product being basically the measure of how well a country is doing in terms of its economy, and so on. So all of this orthodoxy I'd taken on. And I had this moment of questioning growth for growth's sake, but maybe about four years ago. So you know, in 2017, or something, right? So here you are in 1999, having these sorts of thoughts. Now, I know that people around that time before, yes, they have questioned it. But it was, you were pretty early in terms of that movement towards asking if we should be regenerating rather than extracting, you know, thinking. Now we're thinking about circular economies and doughnut economies and so on, right? But you were fairly early. So what happened you after that realisation, you say your days were numbered, how did it unfold for you?
So for about another year or so I think I was really in a sort of state of cognitive dissonance is what they use, and I was really confused. So during the week, I'd go and do my job. And I enjoyed it, like the people I was working with was very, very well paid, compared to, you know, 90% 98% of people. And at weekends, I was reading ecological magazines about the destruction of the rainforest. And this really hurt me. You know, when you go into rain forest, it's an awesome, it's like a cathedral of nature.
And so it pains me physically when I read about the rainforest being chopped down. So I was holding this. And I liken it to a flywheel that's going right the flywheel keeps going. I was no longer putting any... or another metaphor, my favourite metaphor is Joseph Campbell, who wrote the Hero's Journey. He said, you climb to the top of the ladder, and then you realise it's against the wrong wall.
So in a way I was, I really, I stopped putting energy into my career, my advancement, my work if you like, but it kept going, somehow I'd keep going to work. But somehow the life was no longer in it. And it took a couple of years, and I must, you know, giving up not just the money, but the sense of identity. Who am I? So it took a couple of years, but I did. And eventually there was an opportunity. I was offered redundancy. And I took it. I had some options. They said, well, you could look elsewhere in the company. But I said, no, I've got to go out and save the world, you know. And then I spent maybe the biblical analogy, again, is something about a long time in the wilderness. Because what I did was Geraldine, I suppose was really fascinating, knowing this stuff was happening, and I'm very curious about stuff. I thought, well, where's the evil empire? Who are the bad people?
So I started as this corporate lawyer wandering around surreptitiously thinking, is it the CEO? Well, no, it's not the CEO. He's a really good person. I've worked with him for three and a half years, really good sort. Don't like the finance director, but I respect her, you know, I don't think of as evil maybe a bit sociopathic, a bit of a computer brain, but, you know, she's a human being. And so you go around, and I thought, well, hang on, if there's any evil empire in here, I'm part of it.
And so I had this conundrum, this paradox, why is it that these good, responsible, caring people, collectively become stupid, irresponsible and uncaring? What is it about the system? So, in a way I ended up and I used to, and I thought, I suppose because I was good at maths at school, I thought I'm going to solve it. So I'll find the answer to organising, you know, we'll design a better system. Because I could see I could feel if we could get these very, very capable people and all the systems that surround them just pointed in a slightly different direction. Turn away from growth, turn away to regeneration, to love, to peace, to beauty, just switch and solve world poverty. No problem, you know, but they couldn't see. And it's a micro shift, but it's as big as the universe, you know, it's that sort of twist the universe and micro, micro, micro, micron. But it was like the biggest shift in the world so, so I had to get out, because I'm sorry, I can't make that micro shift from within. And I need to understand what's got on to me, and what's happening in these systems. So I spent the next 10 years in a way wandering about, bumping into people, having interesting conversations. I suppose the first thing I encountered was the sort of people you meet outside the system were far more interesting, or not so interesting, but more well rounded, they were more whole human beings. They were...
They weren't as programmed, might you say, because I have that sense that you had, I saw a lot of programming around me, that are just people accepting because it had been given to us at such a, from such an early age, and then just incorporated into our being, that it was a matter of really stepping out of the program because you'd been to an extent, something had broken, whatever it was, the code had snapped in you or something. And then you step out of it, and you start to talk to people who aren't as programmed. That's my take on it. And I guess that's what was happening to you.
It was a complete revelation. Yeah. And I think the programming is a good word for it. I think, I feel I was programmed.
And for whatever reasons, you know, faults, glitches in my system, I woke up to it a bit earlier than some
And so I was sort of bumping into these people and looking. And so one of the first things I did was I say, well, I'll find a better system, let's go into the not-for-profit world, they must be all nice there. And so very, very shockingly, in a way to me was that I found it in a way equally toxic in just different ways. The programming was just as bad, there was often more ego on display, at least in, for businesses, the question of power is overt and so people don't apologise for claiming their territory and so on. In the not-for-profit sector, partly because there's a different relationship to money, often a much less healthy one, I found at least my experience was that there was an awful lot of some really good people and lovely values and so on, but it certainly wasn't, it was a sort of a yin and yang and both were equally toxic, like capitalism and communism, they're opposites, but to whole you need to transcend both. It's not that one is better than the other.
So that was, and then I ended up sort of sensing into social enterprise, which I see as, as this transcending not-for-profit and for-profit. And I suppose the big insight then, as the corporate lawyer was to see, gosh, our legal systems, our legal entities are predicated, they assume that you're either for-profits, and interested in maximising profit but not worrying too much about your impact. Or they assume you're a not-for-profit, no interest in sort of private benefit, and only interested in maximising collective good, and that both of the extremes of those are toxic, but there's no legal entity or no legal framework mechanism to hold both. And so 99% of business people who are founding businesses, I believe, do it from a spirit of a sort of social enterprise, they want to do something useful in the world.
Yeah, they don't wake up and go, I want to make money, they actually wake up and go, I want to introduce this idea to the world and make it a better place.
Exactly. Or they say I want to be a hairdresser. I just want to follow, be who I am. And it can be at a small scale, but but someone with a big vision, you know, think about the big pharma companies. I bet none of them were founded, originally, the sponsoring idea was I'm gonna make lots of money. It was gosh, there's diabetes, there's polio, there's this, and I am going to find a cure. And I'm going to take that into the world. And now what do we find? They all have the big pharma companies basically fined billions for bribing doctors to over prescribe. And how sick is that? Talk about sick.
So what happens to the people and you can meet people who work for big pharma companies really passionate about curing malaria, but then they find some insight and then it feels its way through and ends up at the market department or the finance department who say, sorry, no, that's, um, you know, that's not gonna be as profitable as doing this obesity drug. And so, you know, we can't make enough profit on just curing malaria. So forget it. So anyway, so in my work in the last, that was what really gave me my clarity about the my field of work was around, at least conceptually initially, how do you solve that paradox of the not-for-profit and the for-profit? How do you solve it in a creative way and don't just have a weak compromise, which is not very businesslike and not very, not very social. So that's sort of been my work in the last 10 years. Just following that, whilst trying to make a living because it was, the struggle was to find people with any sort of money, who could pay me to do this in a way radical, advanced research into what's the future of corporate structures.
So I remember when I met you, three years ago now, and it was in your beautiful neck of the woods, literally on the edge of the woods in New Forest, which is, must be one of the most beautiful parts of England, if not the world. And I had the sense of you, as we were talking, because I was beginning to find my way into this new area of profit and purpose, the overlap, I had the sense of you as being this kind of explorer, way out on the edge, gathering new ideas, you know, bringing back the spices or whatever from the trade routes the New World, and bringing it back to us corporate lawyers, still in the system, and saying, hey, look what I found. In that time, I've advanced a little bit more, and I've come up with other structures or come across other structures. But I wanted to ask you, do you still feel like that? Do you still feel like you're out on the edge bringing back the ideas? Or do you feel like people are starting to catch up with you?
I suppose. I mean, like, there is something of the adventurer in me, I mean, I've travelled a lot, and so on. And one thing I have found is that, and I do go and collect stuff, I have an intense curiosity about this subject, so I'll pursue it wherever it leads me just to extreme really. But I found that actually, my real learning is when I encounter entrepreneurs who want to play, because it's that. So really, I'm a practitioner, not a theoretician. So I'll read other people's concepts, the deep thinking on this has been done 50, 100, 200, 300 years ago.
And then my place, I think, is to, and people like Margaret Wheatley, and I can think of lots of others who are sort of conceptually trying to figure out some of this stuff. And I would read it and drink it in and then think, okay, what does that mean when you start writing the by-laws, the Articles of Association, for example. How does this actually play out in practice? I definitely, but to answer more directly your question, I suppose I definitely felt for the first 10 years since, 2002 I left my corporate lawyers job. For the first 10 years, I felt like there was just a few, you know, wanderers, kindred spirits wandering about trying to eke out a living while trying to hold on to their values and what they believed in and occasionally something would come up and they do it for a while. And then gradually, whilst a lot of this thinking was going on the pioneers, and so I'd gather those and I'd meet an entrepreneur, and we try something, particularly the Riversimple the car company I've been involved with. So, but yes, I think in the last five years, so very much it felt like a wilderness where you'd bump into occasional comrades in arms, and otherwise it was just people just couldn't understand what you're talking about.
And so I think both I've learned the language better. So I can help people bridge and relate to. this is. it's capitalism 3.0 or it's not like you need to scrap everything, which is very scary for people, not necessarily the right way. But at the same time, there's huge amounts of activity going on, which is often below the surface, which I'm seeing in the last five years, all sorts of green shoots. And I think that metaphor of in a way, you know, the summer crop, so it's sort of late autumn, and the summer crop is soon to be harvested. And you can see that, all you see is the summer crop, and it's tall, but actually, the winter barley that was sold a couple of weeks ago is just starting to pop up.
And at the moment, we're still seeing the big corporations who are ploughing that furrow and saying, look, you know, they're there, they what's, the monoculture, but actually, there's loads of green shoots which are below the surface, and more and more, you know. So a number of things coming together. The massive disinvestment of fossil fuels, you know, which is huge pension funds, and so on starting to, you know, the huge drop in Exxon's share price as a sign of that. And the pandemic didn't help, of course. But it's much bigger than that.. The impact investing even though a lot of impact investing is the people who are getting drawn into it still think they can maximise returns.
So I think there's a, but actually, people are starting to ask the right questions. And in my particular field, I am meeting more not hundreds, but more and more lawyers and and visionary entrepreneurs who are saying, we need a different model.. We need a different model. And so there's experiments going on. The B Corp thing I've been following for years is really interesting.
Yes, Yeah, so I've worked a lot with the B Corps. And to me, they are actually the best model I have found for...
I think yes.
profit meets purpose, in a scalable way. Because there's tiny B Corps, and you actually do have larger ones.
I think, in a way, the B Corp I think is an interim solution. I think there's not a radical rethink, because it's still, if you think about it, the B Corp model is an enlightened shareholder model. You have to have enlightened owners, and they tolerate a change in the bylaws to implement a purpose.
And because they're the owners, they can always change it. So like Etsy did, Etsy raised some money, the new owner said, we don't like this B Corp thing, you're not a B Vorp anymore. Or Innocent sold out to PepsiCo. Well, there's lots of examples.
Yeah. That mission lock issue is actually one of the enduring issues for, or challenges, for B Corps.
That's right, because it's still it's not a complete, what we're needing, I think to shift is a sort of an extinguishing of the all-powerful shareholder ownership model.
You know, if you think about it historically, in about the 1810s, 1820s, 1830s, there was a whole movement about slavery and about abolishing the slave trade. 20 years later, the limited company structure was finally fixed. And so all the rich people could say, we don't need to have slaves, we can just have employees.
So that was sort of the, you know, freedom of capital was more important than freedom of employees, right in the 1800s? And so that's sort of what we're still wrestling with is that whole serfdom. And of course, in theory, employees are free but the programming you talked about means that what's the real reality of that freedom? Freedom to follow their hearts? Freedom to come into work and give their opinion of the boss? Freedom to say, well, you know, these are my spiritual needs? Forget it, you know, put the suit on, dress up and look like a responsible employee. So, yeah, so but I think. so I think the old system is still for many, many people dominant, but I do think it's, I'm seeing lots and lots of different signs of that it's crumbling from within, you know, you hear stories of FTSE100, you know, large, huge corporation, senior executives, who say I'm deeply, deeply worried about climate change and my role in it. But if I come out and say that I'll be fired by the shareholders, so what do I do? So there's all this soul searching going on where the old system is being hollowed out, no one really believes that anymore in GDP and all that nonsense, that cancerous system which says that, every year we have to go another 10%, 15%, 20%. Every year. And that's that's the mentality of cancer.
And it's going back to the issue about ownership of employees, all of the well being issues that we see with employees, the overwork, the anxiety, depression, addiction, you can go on and on and on. This is also part of the overworked system or part of this whole system that you're talking about.
That's right. And it's of course, there's organisations where actually the employees, if they're individually well educated, they're well paid, they can be very powerful. So it's not always, it's more complex, but that probably was the same with some weak slave owners and some strong slaves, you know, who were organised. But I think the, yeah, you know, if you think about the roots of the word to employment, you know, it's "used", so an employee is used by, so how does that make you feel as a human being? And I can imagine that, you know, in a company where I certainly had very good experiences of being employed, I've had very enlightened, thoughtful, caring bosses, but the idea of being employed now, that was really good when I was in my apprentice phase, in a way.
I think a caring boss who was sort of overseeing and helping them supporting wasn't always the case, but actually, that they can work. But the idea that someone's employed for life, employed. A 50 year old person being employed is demeaning, I think. Used by somebody else, used for somebody else's purposes. And we think it's normal.
So a systemic change, right? Where we were getting rid of the whole idea, eventually, of how companies are owned, of how people are employed, of how companies are financed and so on and so forth, makes me think of the work that, I don't know if you've come across it, the British Academy had a project called the Future of the Corporation.
And they looked at the Principles of Purposeful Business. And I thought that, they came up with eight areas where there had to be change: law, regulations, ownership, corporate governance, measurement, and performance being measured properly as well. financing and the investment. And I think if you actually begin to look at it in that holistic way, then you can see how much actually needs to change. And what's actually happening, to your point about the green shoots, is that all of these areas are seeing innovations within them, moving towards that common goal. It's just not harnessed.
Yes, I mean, the work, I think it's some of the best work I've come across is the Future of the Corporation. I suppose what I see and Colin Mayer is brilliant. I've got one of his books up here.
The chap who's led it.
I think, in a way, my work because my key strength probably is in the concept level, so he in a way has taken different bits and people can go away and many, many... amazing work has been done on each of those individual bits. There's a new sort of steward organisation, a group I met, there's something called the Purpose Foundation in Europe, in the continent, which is looking at different types of ownership. I suppose for me, conceptually, we're shifting from a sort of a top-down assumption that purpose needs to be led or owners, finance, money needs to be led, or a big white man needs to lead, you know, somebody must be in charge of this chaos, right? And what the insight from quantum physics of, you know, 60,70 years ago was, well, life ain't like that, you know, life is dynamic and moving. And sometimes you have to see light as a wave. And actually, depending on how you look at it, it will show up as a wave or individual particles. And that's, you know, and you can read this in the Tao de Ching of 2000 years ago. So what would a... and as soon as we have this dominant thing, it just tends to sort of adopt the thinking of a cancer cell and just grow, grow, grow, grow, grow. But if we allow a much more human, you know, like, our left brain, right brain. Who's in charge, you know?
Who's in charge of a forest?
Who's in charge of a forest? Where's the head tree, you know?
This is what we do, right? We do to make sense of an organisation or complex system of people, we sort of go in and say, oh, who's in charge. And in a way, the neatness of a legal structure is it brings a template to say, in all this messy humanity, well, that person is in charge, that group of people are in charge, and that person, that group and their employees, it's very simple. And I think the evolution that's happening is to... evolution tends to bring greater complexity. So what if we had four CEOs and five boards? Have, you know, and one board is a youth board, which particularly takes care of the children? So what if an oil company had a youth board and it had a wise elder, wise elder women board? You know, and then nobody's in charge? And that's much more like shifting to a democratic model.
Where you say, well, actually, the judiciary, the executive are powerful, but they can't tell the judiciary what to do, unless it's a one party state. Right. And the free press, I know, it's not very free in most... it's all owned by billionaires, but where it is free, that's an incredibly important levelling, moderating influence in society. So why shouldn't we have a free press in an oil company, you know? Saying, there are companies that have an equivalent. Any employee can write in, in one big retailer in the UK, John Lewis, any employee can write in anonymously if they want and the letter has to be published. So this is like a notice board for the whole organisation to see, here's what people are worried about or thinking about or questioning, and the responsible director has to respond. So it's almost like a press conference that the company has to hold every week saying, here's what's going on.
Or it's ... we have a system here where if enough people signed a petition, then Parliament actually has to respond to it. They don't have to pass the law, but they have to actually make a response.
Well, that's right. So I think those are the shifts that I see, there's more complexity when we say, and I think a lot of people get impatient sort of, you know, in-a-hurry business people think, well, you can't bring all that messiness and complexity. But this in-a-hurry well, I've got to be in charge, someone has to be in charge, is giving us climate change and deep inequality and so on. Yeah, so I think that's the shift, is this more complex models are emerging. As soon as you think, well, maybe nobody needs to be in charge all the time. Maybe someone's in charge some of the time. But there's always this fluidity. You know, the best democracies, power can shift without war. So what if an organisation without winners or losers, we just say, look, leadership moves from day to day, week to week, leadership's moving from different places. And when there's a big complex, messy decision to be made, the leadership is by the wise elder group, who will smoke this pipe of peace and reflect on it and take all the views.
You know, why should the CEO have to have all the answers to everything? So I think and I know, that's simplistic way of saying it, but actually, that's the mindset that governs the way we structure things. And the need for the owners to control means we have one board. So we'll have multiple boards. And the other work I've been doing, I suppose, is particularly focused on maybe four elements. So shall I talk about that?
I think the first thing is, as practical law, the first thing is freeing the board from the responsibility of having to put shareholders' interests first. And though the section 172 of the Companies Act from the UK, is there's a certain ambiguity, but basically it says financial interest of shareholders first, everybody else second.
So what you're allowed to do though, is, of course put a purpose in the by-laws. So that's the first thing I do just like a B Corp. That was their insight too. Change the purpose of, the board are freed up to say, you know what, we won't necessarily maximise profit in this situation, we'll look after the employees or the customers or the planet.
The second thing then I'm doing is saying, well, that's at the whim of the shareholders, so I embed it in with a mission lock. So you have a golden share, which is a fairly old structure. It's been around for 50 years or more, I think. Certainly in the 70s, 80s in the UK that was used to lock in. If British Aerospace was privatised, the UK Government kept a golden share. Malaysian Airlines has a golden share and it's owned by the Malaysian government. So and people have been tweaking that to say how can this be used to to lock in a mission and prevent, because what tends to happen I talked about earlier the dynamic of a business is, over time, it tends toward maximising profit, rather than balancing profit with purpose and stakeholders' interest. So the mission lock is one way of trying to hold that difficult line and not get pulled in any direction. So then you have a not-for-profit, which holds that golden share and holds the business to account.
Um, I think the third area I find really interesting is the whole sort of hierarchical structure, which psychology shows that if you have this rigid hierarchy, the person at the top starts to believe theyre God and can't do anything wrong. And the people below, feel disempowered, stop believing in their own feelings and sense of agency, they start to think well, maybe the boss does know more. So there's a huge amount of work being done. Particularly I guess, the sort of the iconic book in this is the Reinventing, yeah.
Yeah, that one has become....
I love that book. Yes. Yeah.
And it's translated into many languages. It's sold 100,000 copies in Japan alone.
This has become a complete mass movement.
Okay. Would you just briefly talk about what Laloux says in that book about the lack of hierarchy before you go on to your fourth element, because it's so important.
I mean, yes, I mean, in a way, in a way, he's not talking about abolishing hierarchy. I think he's misled by that. But what he's saying is that we shift to a much more, we break away from a rigid hierarchy, we dispense with bosses.
We might still have management and management systems, and you need people to hold. But we start with, rather than an individualistic approach, which says we're all individuals, we have a boss, we have a boss, we have a boss, we say, let's start with a team.
And that's the core organising unit, is the team. And that, for 10 to 15 people, it seems to be a good number. And between them, and the 10 to 15 number is quite a magic thing, because between them, they know each other intimately. There's enough diversity of thought, which is really important to make good decision making. And there can be autonomous enough skills in the group to decide their own finances and decide how they. you know, so that's very powerful. And then you have coordinators, you don't have bosses, no one from the outside can tell them what to do. You may have policy setting at a higher level. But that's also done in consultation, in consensus, in a dynamic dialogue between the different teams. And he's given examples of companies with more than 10,000 employees who have no bosses, lots of management to replace the old, you know, bosses system and lots of free flowing information. But no rigid hierarchy in the same way of control systems from some central point.
So yeah, it's phenomenal.
And so I like that, because it also enables that fluidity that you were talking about. a more organic direction of the organisation, right, so it doesn't actually follow someone's lead or someone's strategic plan where they've paid a consulting firm a bunch of money to come up with it. They actually organically look at what the employees want. They're testing it constantly, which is very, very much like nature.
It's a much more human and natural way of working. Yeah.
Yes. But there was a fourth, a fourth element?
Well the fourth one, I mean, that there may be a few more I mean, the measures and all that, but that's not my field. Measures is really important.
The fourth one I'm particularly interested in is the whole question of concentration of power, which is, of course related, but Laloux doesn't talk about this so much is this thing about democratisation and not a simplistic democratisation of one person, one vote.
But maybe, as I said, sort of polycentric governance, where you have a wise elders board and you have different centres where, of different centres of expertise. Like you might have an ombudsman, who doesn't report to the CEO, who can oversee. One company I know of has an ombudsman and any member of staff, they've got 70,000 employees, if a member of staff is fired, they can appeal to the ombudsman. So that's a real nice regulator, you know, much better than the law.
And the Ombudsman is independent of the company then?
They're employed by the company, but they have no, they don't report to the CEO or anything.
They're almost like an independent judiciary...
...that says, okay, we're gonna look into this before an employment tribunal, we're gonna look into this to see is this within our values that this person has been fired and how's the manager performed? So there's sort of an internal, independent judiciary, so it's takes it outside, which is a much better, less artificial and remote abstract way of solving things than looking at the law. You say, what are our values? What's going on here? How can we do some sort of reconciliation of this and feed it back into the organisation in a healthy way?
Yeah. What you're talking about there actually makes me think about something that I'd been working on at the beginning of this year, which was trying to understand Indigenous, in Australia, Indigenous Australian ways of governance. Because they do not have a concept of leadership, they have a concept of elders, and you don't automatically become an elder just because you happen to be an older person, you become an elder through spiritual initiation. And that means that you understand what it takes to keep the clan together or the tribe together. You've been through experiences and you've been tested. So the group can trust you to do that. And so I was thinking about how, what that would look like in a corporate setting and what you're talking about reflects that.
I'm feeling a bit moved, actually, Geraldine because in 1989, I was in Kakadu National Park in Northern Territory.
And I spent two and a half hours in the company of Bill Neidjie. He was a... who has had a book written about him the Kakadu Man, and he was a traditional, he was an elder.
A local. And it was just, he gave us a lift, we were hitching and remarkably, this jet black man, and it was a bit disconcerting being a very white, you know, sheltered upbringing, man, but he gave us a lift, and there was something, and I only understood his accent was so thick, I understood about a third. He must have been in his, he had grey hair, he was about, you know, in his 60s, probably. And I only understood about a third of what he said. But boy, just being in his presence was remarkable.
I just knew. God, this is a very special person. So I think you're right, that actually, there's lots to be learned. Just as when the founders, the writers of the American Constitution learned a lot from the governance methodology of the Native American Indian.
I wonder, one idea I like, I think there's a lot to be done on that, I'm not an expert at all. I love the idea of some tribes in North America, they had two chiefs. So that's a nice start. For a start, you don't have one president, you have two: a peace chief and a war chief. Okay? And theyre sort of equal. Before you can become a peace chief, you have to have been a war chief because you don't understand peace properly, unless you've been a war chief. Right? Because you mustn't be frightened of war, to be a proper peace leader. But the other thing is, those chiefs were appointed by the wise elder women. And just imagine from the ego perspective. Our elections are popularity contests, you know, Trump, Johnson, Bolsanaro, look at me, I'm the best and the most wonderful, I can say the biggest bullshit, but I can do it with confidence. And so vote for me and wonderful, beautiful, what does that do to the ego when you win?
But just think, alternatively, one day, granny comes and taps you on the shoulder and says, junior, you know in his 30s maybe, I've been watching you for a few years. I think you've got what it takes to lead our community. Do you think you're up for it? It's a big responsibility. Just imagine what that does in a different way, if that was done to the head of Exxon, or the head of your mining companies who were going like that about climate change, and so no we're going to, it's all about the money and the digging it up. So I think that that is one way, I think sometimes this thing about, you know, we must get lots more women on the board, the board has a certain dynamic, and it's more of a sort of masculine energy. What if you partnered it up with with some wise elder, mainly women, you know, maybe the boards could be mainly men, but it has a different role. And there's mainly elder women to appoint the board, or who interact with them in a complex ways.
Imagine what our Parliaments could be like, if you, if they're populated by wise elders.
Men or women. And so this is why I think for me, the future is, in part, this polycentric governance where different groups have different roles. And we don't just look to one white man, maybe we look to... you know, in in a way we have sort of that in our democracy with the Queen. I'm not a lover of royalty or the monarchy, but the idea of the Queen, she's really embodied the spirit of service, at least from an English, you know. I mean, think we should get rid of the monarchy, but in a very thoughtful way, because what we've got at the moment, is, you know, she had to decide when Winston Churchill had a bit of mental illness for a while. Who else was going to get rid of him? Who could? Well, the Queen could, she had to make that decision. And actually, he recovered. So she didn't, but so she had that responsibility. And I think that's not the perfect model. But I think we can do a lot better with with with both governments of our countries, but also corporations.
Ah Patrick, I could have asked you many more questions. In fact, I had many more, but I'll suggest that we wrap it up, because we're coming to time. But I just enjoyed this conversation so so much, I could really literally talk to you for hours. Your experience, the 20 plus 30 years experience thinking deeply about all of these issues certainly came to the fore. So thank you so much for joining us. And yeah, we'll chat again.
Yeah, thanks, Geraldine. It's always nice to be asked because you never quite know what's going to come out and so, yeah, I'm, as you know, I'm very passionate about this subject. So thanks for having me.